Nokia has demonstrated converged Wi-Fi and cellular telephony - using a standard which the mobile industry hopes can send the PBX the way of the fax machine.

At an office in the US, Nokia routed calls in both directions between Wi-Fi and the cellular phone network, using the cellular industry's UMA (unlicensed mobile access) standard. The company also showed data calls going over Wi-Fi onto the mobile network.

UMA was designed to extend the mobile network over Wi-Fi hotspots and home Wi-Fi networks, allowing the mobile operators to offer a mobile that doubles as an indoor cordless phone for businesses and consumers. It is part of the future direction of 3G networks, defined in the 3GPP standard.

Nokia promised to support the Wi-Fi version of UMA earlier this year, and has announced Wi-Fi enabled phones - the E60 and E70 for the enterprise and the N91 for consumers.

However, dual-mode phones are a double-edged sword, as the same phones could also be offered by fixed providers as PBX extensions, using SIP and IMS to route across the Internet, and with the ability to make mobile calls.

So far, the only UMA product is BT's Fusion, a more limited product launched using a Bluetooth station for the indoor wireless connection, as dual-mode Wi-Fi handsets were not then available. As a fixed-line provider, UMA is not a good fit for BT. The company has kept Fusion on a limited trial for longer than expected, and is widely predicted to be planning a move away from UMA in the future.

Mobile handset providers have historically followed the desires of the mobile operators, and it looks as if Nokia is continuing that tradition. "The mobile operators are in a better position," said Ken Kolderup, vice president of marketing at the leading provider of UMA software, Kineto Wireless. UMA will allow cheaper indoor services on subsidised mobile phones which people are already using instead of the PBX.

"Already I almost never pick up my PBX phone," said Kolderup. "When UMA cuts the cost of indoor mobile calls, the PBX could go the way of the fax machine."