LONDON (Reuters) - EBay Inc's Skype is working with British cell phone service operator 3 to produce a handset that will allow users in Britain to make free calls on the Internet, a spokesman for the company said on Friday.

A spokesman for 3 confirmed that the group was working to make Internet calls mobile but would not confirm any further details or who it was working with. The phone is expected to work in the normal way but to include a Skype function to contact other Skype customers.

Skype uses an Internet connection to place a voice call, cutting out the telephony network for which telecoms operators charge by the minute. Skype calls to other broadband-connected Skype users are free.

The Skype spokesman did not give any further details but said the phone would be out later this year. 3 is the British cell phone business of Hong Kong conglomerate Hutchison Whampoa.
© Copyright 2007 Reuters.

Photo:
A model demonstrates a new IPEVO Free.2 Skype internet phone during a news conference in Taipei January 17, 2007. Skype is working with British mobile phone service operator 3 to produce a handset that will allow users in Britain to make free calls on the Internet, a spokesman for the company said on Friday. REUTERS/Richard Chung