Now mobile phone users get choice of 'free' calls

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A service that lets users make free mobile phone calls between 3G handsets has been launched this week with a view to replicating the success Skype has had in the fixed-line telecoms market. The service, called fring, is available to early adopters before a full commercial launch around Christmas.

Israel-based fring's service uses voice over internet protocol, or VoIP, technology to allow free calls between its users. It differs from other VoIP services in that it is available without needing to use a computer or a special mobile handset.

Mobile VoIP poses a significant threat to traditional network operators as savvy consumers can use the technology to avoid paying for expensive mobile phone calls. Customers will not have to pay a subscription to use fring as the voice calls will be accounted for within data bundles in existing mobile contracts.

Some telecoms operators have launched mobile VoIP services that carry calls over the wireless broadband technology wifi but a lack of wifi-enabled handsets has curtailed its mass-market appeal. The investment bank Citigroup recently said that the battery on the available handsets only allows for up to an hour's talk time which limits its consumer appeal.

The fring service hopes to solve this problem by offering mobile VoIP over a customer's existing handset. Users will need to download the fring software from its website and have a 3G or wifi-enabled handset.

Like Skype, and other new media companies such as YouTube and Google, fring will concentrate on building its customer base before looking to establish a revenue stream. It is backed by private equity companies Veritas and Pitango.

Avi Schechter, the chief executive of fring, said that the company is considering ways to generate revenue from advertising and value-added services once it has built a sizeable customer base. He added that in the future, fring will allow users to call traditional mobile and fixed-line telephone numbers but will charge a standard fee to do so to cover the cost of terminating the call on a rival network.