Vodafone shows Internet calling on cellphones

HANOVER, Germany (Reuters) - Vodafone, the world's most international cellphone carrier with over 200 million subscribers, showed Internet-calling for cellphones with Skype, which it said it may launch in the future.

Code-named Starfish, Vodafone showed the application in the future zone of its booth at the world's biggest technology trade show, CeBIT. It has yet to decide whether it will start offering consumers the service, which could eat into its traditional mobile voice telephone business.

"We have not yet decided if we will launch it, or the commercial terms and prices," Jan Holzberg, the manager for the product at Vodafone Group, said on Thursday.

Starfish allows a cellphone user to see a list of buddies from various chat and Internet calling groups, such as MSN, Yahoo, AOL and Skype, and send messages and make Internet calls.

The calls only use the traditional wireless voice channel from the phone to the radio base station and the rest is carried over the Internet, even if the call goes halfway around the world, as opposed to normal voice calls, which are routed over the traditional voice telephony network.

The Starfish software on the cellphone is essentially the same Skype software which is used by Vodafone's much smaller rival "3," owned by Hutchison Whampoa, which it launched last year in an attempt to find new customers to boost network traffic.

As a market leader, Vodafone needs to defend its market share against rivals.

Starfish is a sign that Vodafone, the world's top mobile operator outside China, and Skype, the world's largest Internet communication company, with nearly 200 million registered users, are finally coming together. Skype is owned by eBay Inc.