A new player in the competitive UK mobile communications market emerged today when Vonage announced a new Wi-Fi based mobile phone service.

The US VOIP (voice over IP) service has combined with a leading Wi-Fi hotspot location operator The Cloud to allow Vonage users to make cheap calls whenever they are in a wireless hotspot.

A special handset will detect when the subscriber is in the hotspot and switch calls to the Vonage servce. Whenever a user leaves the hotspot the call will be disconnected and the user will need to use a traditional network to finish the call.

Although the system is likely to be slow to take off initial its clear that this is the way forward for mobile services as more and more wireless hotspots are springing up across the UK.

We understand that the service not cost extra for current subscribers paying around £7.99 per month to make unlimited UK calls. Handsets are expected to be around the £70 price range.

BT already offers a similar service using a Bluetooth connection to allow mobile phones to use a fixed line service within a short distance from a home or office “BT Hub”. The calls switch to Vodafone if the user moves away from the Hub. Mad4mobilephones understands that BT plan to launch a Wi-Fi version of this service in 2006.

More details: www.vonage.co.uk