Carphone Warehouse and ten other companies are to become mobile operators, selling indoor mobile cells that will free users from mobile operators inside their offices.

By the end of this year, businesses will be able to install "pico-cells" in their buildings that can handle calls from any cellphone, but will route the calls - and GPRS data - over the Internet for free.

The services have been opened up by Ofcom's auction of low-power licences for GSM services on a spectrum band previously set aside to protect DECT cordless phones from interference. That spectrum will allow any GSM phone to operate like BT's Fusion service, or like converged Wi-Fi/GSM phones - but without the technology difficulties those services face (read GSM pico-cells will slash mobile costs).

"The biggest emphasis will be on deploying dedicated pico-cells in offices," said Martin Wren-Hilton, who will head up Carphone's low power GSM operation. "It's a private indoor mobile network for the enterprise." These services should appear before the end of the year, with smaller "femto-cells" appearing for the home early next year.

Carphone Warenouse has not released any news officially yet, and would not comment directly.

Ofcom announced the winners of the auction yesterday, with O2 the only existing mobile operator. Carphone's bid is led by its subsidiary Opal Telecom, which will be picking up the plans of Martin Wren-Hilton's company, Coffee Telecom.

The licences are not geographic, so any operator can set up low power pico-cells anywhere, provided they keep to agreed power limits and interference rules. Each operator will pay the licence fee it bid to Ofcom, and these prices will be made public next week. Two companies were outbid: Zynetix and Orange.

"The price for making GSM calls when users are at home or at work will plummet," said Dean Bubley of Disruptive Analysis. Operators without low-power licences will offer cheaper calls at designated "home" cells, a business model already operating under the HomeZone name in Germany, he predicts. "If large enterprises and government bodies have a choice of 16 mobile operators, it seems very likely that corporate cellular tariffs will cease to be such a burden on CIOs' telecom budgets."