Volný, a Czech Internet portal and telecommunications company, will this summer introduce a service that allows mobile phone users to make calls over the Web using so-called Internet telephony technology.

"Our new service will allow mobile phone users to call through regular GSM networks or to connect to the Internet via Wi-Fi hotspots and make VoIP calls," Volný's spokeswoman Stanislava Beyerová said.

VoIP, or voice-over-Internet protocol, is a technology that allows people to make phone calls using a broadband Internet connection instead of a regular analog phone line. It is considerably cheaper than making regular calls — in many cases it's free — and standard service can be used through a computer, IP phone or a normal phone fitted with an adapter.

Volný has offered standard Internet telephony since October, but its new service will enable customers with mobiles that have broadband Internet capability, such as the recently introduced Nokia E-series dual phone, to make calls either through regular GSM networks or on the Internet in wireless (Wi-Fi) hotspots.

Within Volný's network, mobile Internet callers will be able to phone for free. Also, there will be no roaming charges on international calls via the Internet from or to another mobile phone.

Volný's project is a breakthrough for the Czech telecom market because it marks the introduction of pure mobile VoIP service. Other providers have offered products that don't fully utilize Internet telephony technology.

Volný's service will be especially attractive to corporate clients with Wi-Fi signals at their offices, said Tibor Bokor, an analyst at Wood & Co. Indeed, the savings could reach tens of thousands of crowns a month.

Telecom analysts, including Bokor, said the launch of this technology should benefit consumers by creating more pressure on operators to lower mobile phone fees. But it won't shake up the market.

"It is unlikely that it could bring about any major shift in power on the mobile telecommunications market," Bokor said. "The VoIP service for mobile phones is territorially limited by the reach of Wi-Fi hotspots, which are not widespread in this country."

The Wi-Fi factor

Several alternative operators have tried to penetrate the mobile market by becoming virtual providers that rent network space from other operators, but they haven't had much success in this country.

As a result, Volný is trying to penetrate the market using Wi-Fi hotspots. Wi-Fi coverage is limited here, however, especially outside Prague, so the big three operators — Eurotel, Vodafone ČR and T-Mobile — aren't too concerned.

"The Wi-Fi coverage in this country is very limited, so it cannot pose a threat to GSM networks at the moment," said Jiří Hájek, a spokesman for T-Mobile.

Wi-Fi coverage should increase in Prague because it received a 37.3 million Kč ($1.65 million) subsidy in May from the European Union for developing hotspots in 24 of its districts.

"The EU money will cover half of the total expenses, which should reach as much as 89 million Kč," said Ivan Seyček, head of the City Hall's information technology department.

City Hall will call a tender for companies interested in developing more hotspots.

Right now, the best coverage is in Prague 5, which began developing hotspots in March 2005. The wireless signal covers about 90 percent of the district, servicing around 8,000 people, said Jaroslav Neubauer, spokesman of the Prague 5 town hall.

Other districts, however, have been reluctant to subsidize the development of wireless coverage because they're concerned about being sued by telecom operators, some of whom lodged a complaint against the Prague 5 government with the Anti-Monopoly Office earlier this year.

"We're waiting to see how the legal disputes will end, and then we'll decide what to do," said Jan Šlajs, spokesman for the Prague 1 town hall.

Fast expansion

While mobile Internet telephony is just getting going here, standard VoIP services are growing rapidly, with approximately 100,000 Czechs making Internet calls.

Dominant fixed-line operator Český Telecom announced earlier this spring that it would start offering VoIP services to households in the second half of this year.

Karneval, a cable television company, launched the technology in February, and rival UPC plans to do the same this summer.