BT plans to sell 20 different converged Wi-Fi and mobile-phone models next year as part of its BT Fusion service, an executive said on Wednesday, during the Smartphone Show in London. The telco also has other plans to expand the service, and is keeping a keen eye on the competition.

The converged Wi-Fi and GSM (Global System for Mobile communications) phones, many of which will support 3G, will come from manufacturers including Nokia, LG Electronics, Motorola and HTC, according to Dave Woodbridge, general manager of mobile devices at BT. "We're spending huge amounts of time working with the manufacturers," he said.

BT launched Fusion with much fanfare earlier this year. Customers use a single handset to make mobile-phone calls over the wide area network and low-cost VoIP (voice over IP) calls in their homes via a Bluetooth connection to BT's broadband service.

When Fusion launched, it was criticised for using Bluetooth rather than Wi-Fi. BT said then that the converged Wi-Fi and GSM handsets of the time were still too expensive for the mass market.

BT is planning to launch a business version of Fusion, Woodbridge said. The plan is in line with those of other handset manufacturers and vendors, which are also promoting the use of single handsets that enable voice over Wi-Fi in the office and mobile elsewhere.

Woodbridge initially suggested that BT has an advantage over operators such as the UK network of Vodafone, which doesn't own a landline network and thus can't offer a similar service as efficiently. End-users might prefer a service such as Fusion that allows them to browse the web over Wi-Fi in the home at a faster rate and lower cost then browsing over a 3G mobile-phone service, he said.

However, the trend toward bundled mobile price plans is a threat to Fusion. "Bundled minutes on GSM are a concern for us," Woodbridge said. That's because the cost of browsing becomes less of an issue when customers subscribe to monthly packages that include large volumes of voice and data for a set price.

Vodafone ultimately benefits from the Fusion service because BT doesn't own a mobile-phone network and resells service to customers from the Vodafone network.

The Fusion service may also be threatened by free VoIP services such as Skype, which customers could use in the home instead of Fusion. Calls on Fusion in the home cost £0.03 a minute during the day and £0.055 an hour in the evening and on weekends. BT will compete with Skype and its ilk on quality of service, because it's unlikely that BT could legally block access to such free services, Woodbridge said.