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Why are Mobile phone networks expanding into fixed line broadband services?

O2 have become the third UK mobile operator to expand into fixed line broadband services. O2 recently bought broadband operator Be Un following in the footsteps of Orange who have teamed up with Wanadoo. Vodafone also plan to bundle broadband with its wireless services.

O2 will have some competition with Orange currently offering free broadband connections to customers who subscribe to service plans on a £30 or more tariff per month.

The reason for networks combining mobile phone and broadband services may have something to do with VOIP (voice over IP). VOIP allows people to make phone calls over the internet for largely discounted rates. There are currently a large amount of wireless hotspots being constructed all around the world which would mean that you would be able to detect when you are in a hotspot area and use VOIP to make your telephone call, which would cost you much less than using your mobile phone should the proliferation of hotspots continue unabated.

BT have hit back against VOIP with BT Fusion. BT Fusion mobile phones are like any other mobile phone only when you are at home a wireless modem can detect that you are in your house and therefore only charges you landline call prices. With moves on the broadband market coming from so many mobile phone networks, could similar solutions be far behind?

It will be interesting to see how many other networks expand into broadband services, and how popular VOIP becomes. Could this see the start of a mobile phone and broadband/VOIP war?