Cable & Wireless has announced plans for a converged mobile network for enterprises in the UK, put together with a low-power indoor GSM licence, and a deal with Orange.

The operator's ambitious plan will effectively turn it into a mobile operator, providing large companies with indoor base stations for their offices, and handsets that will connect via the Orange network outside those buildings. Unlike converged services such as BT's corporate Fusion, which require dual-mode phones using Wi-Fi, these will be any conventional GSM phone or Blackberry device, since the indoor technology will use a low-power GSM spectrum licence, which C&W bought in a 2006 auction.

"We already have 15,000 mobile under our management," says Simon Farr, product manager for FMC at C&W, referring to deals where the company manages customers' mobile contracts. "The time has come to move that to the next stage."

The service - to be launched at the end of 2008 - will reduce the costs of the way people actually work, and simplify it by moving mobile minutes onto the corporate network, and giving users one voicemail system. "More and more people are acquiring mobiles because they want to work flexibly, even within an office environment," says Farr. "I have a Blackberry and I want to check my email and make calls wherever I am in the building - because of the ease of it."

This is the first sign of serious activity in spectrum which was originally set aside as a "guard band" between DECT and GSM spectrum, and can easily be used for corporate phone systems, since any GSM phone can use it.

"The technology that we are looking at is tried and tested, while others are less well developed" said Farr. "The cost of changing a large mobile estate onto dual-mode handsets can be quite high."

The service - which won't reach customers till the end of 2008 - will use Orange for roaming outdoors, but the phones will display C&W as the provider. The service will use C&W's existing MPLS enabled core network to handle traffic alongside existing VoIP calls. Ericsson will provide necessary equipment to link turn C&W's cloud into a fully-fledged mobile network, as well as the base stations in the customers' premises.

Prices for the twelve licences varied widely in the auction, with C&W getting its licence for an eBay-style £51,002 bid, and Teleware paying £1 million. Despite moderate excitement at the time, there has been little activity, apart from some activity by Teleware which launched an enterprise telecoms service and is now trying various options.

With other licences in the hands of companies including BT, it is quite likely that other services may be in the offing by the time C&W delivers its service. Any service will require a mobile partner for national coverage - and international roaming. Orange gains from a service that is designed to reduce call charges, because C&W addresses customers it does not reach, said Farr.