BT plans to launch Project Bluephone - the first step to handset convergence - before the end of the year.
Bluephone is designed to remove the need to own more than one phone, by having one device that switches between fixed and mobile networks - lowering costs.
Whenever customers are within reach of a BT wireless access point in their home or office they will be able to connect at the best available speed and quality through the BT network.
If they move out of coverage range, they will switch to Vodafone's GSM or 3G network.
BT said Project Bluephone has undergone successful trials with 50 users over the past two months.
Alcatel, Ericsson and Motorola have been brought on board, and a 'soft launch', involving more than 1,000 users, is planned for this summer, with a full launch later this year.
"There has been a lot of talk about fixed and mobile convergence but, from later this year, it will be here from BT," said Steve Andrews, BT Group chief of mobility and convergence, in a statement.
"Project Bluephone, and the developments that will follow it, will be key in helping us offer the world's first fully converged fixed-mobile service."
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