BT is hoping to offer consumers a package of broadband, fixed-line and mobile services on a single bill. It is targeting 1bn pounds ($1.77bn) in revenues from the project within five years.

Bluephone is the working name BT has assigned to the project, which will allow both residential and business users to have a single telephone number to make and receive calls wherever they are.

The idea is that when users are within 25 meters of their Bluetooth base station, the phone will carry all incoming and outgoing traffic over the fixed line. Multiple access points can be used in larger sites, such as offices. When users are outside the range of the Bluetooth station, the handset will switch to GSM or 3G coverage.

To this end, BT is working with Alcatel SA, which has been selected as the prime contractor for the Bluephone project. BT is also working with LM Ericsson Telefon AB and Motorola Inc on the project.

The former UK telecoms incumbent recently announced that it will operate as an MVNO (mobile virtual network operator) on the mobile network of Vodafone Group Plc.

BT already operates a UK-based MVNO service in partnership with T-Mobile International AG under the brand of BT Mobile. It claims to be signing up about 20,000 customers per month, putting it some way behind the UK’s highest profile MVNO, Virgin Mobile.

BT is planning to end its partnership with T-Mobile and transfer the service to Vodafone’s network.