BT's joint venture with Gratis Tel of Sweden is called BT Freetime. Energis, which provided the Internet infrastructure for Dixon's Freeserve, is providing the telecoms infrastructure for a similar service called Freedom.
Mr Edmonds will have a minority stake in Freedom, and will become its public face when it launches in the summer.
Subscribers to both services will still have to pay their normal line rental. They will be given a code number to ring, which will hook them into the network. They will then have to listen to 10 seconds of advertising before being connected to whoever they are calling.
Both groups are impressed by the success of Gratis Tel in Sweden, which was launched earlier this year. It claims to have captured 7 per cent of the Stockholm phone market, and a planned float will value it at around $100m.
Freedom is keen to beat BT to its launch in the UK, and is already approaching potential subscribers.Reuse content