O2 brings home zones to Blighty

O2 is bringing its 'home zone' tariff to the UK, offering users free mobile calls from a particular location - a move that may help see off the nascent threat from FMC technologies.

Under the Favourite Place scheme, pre-pay users can get eight hours of free calls to landlines and other O2 mobiles from a particular location once they have texted a postcode to the operator.

O2 has already been using 'home zone' pricing in Germany under the brand name Genion, where it has seen significant take-up. It has almost four million subscribers under the Genion umbrella, including 71 per cent of contract users.

Among the customer segments O2 hopes to hook with the service are students, who could register their halls of residence, or workers who could choose their office as their favourite place.

For operators, home zone pricing is one carrot to tempt consumers to ditch landlines once and for all in favour of their mobiles.

Such fixed-mobile substitution (FMS) is already taking hold fast in Europe and FMS is predicted to result in more than half of all voice traffic in Western Europe originating on mobile phones by the end of 2008, according to mobile researchers Analysys. More than 10 per cent of Europeans are now thought to have no landline.

Some industry watchers believe the mobile home zone offerings could potentially stunt the growth of FMC services - where a single device is used to make both cellular and VoIP calls - because they may trade on the same key idea: cheaper calls from a fixed location. In FMC's case, those calls are cheaper because they are made over wi-fi; for 'home zone' pricing, operators simply cut their prices when a call is made in a specific location - a home or office, for example.

A spokesman for BT, which has an FMC product called Fusion, told silicon.com it will be able to differentiate its product from such 'home zone' offerings by selling cheap minutes when a user is by a BT hotspot, whether that's in their house or not. "This isn't just a short term thing to get people in their homes," he said.

An O2 spokeswoman denied the company has FMC in its sights. "It's about finding out how customers use their phones - it's nothing as cynical as taking things away from FMC," she told silicon.com.