Orange, the mobile business of France Telecom, will today launch a fixed-line telecoms service in the UK targeting small and medium-sized businesses.

The move is the first by a mobile operator in the UK and is in line with France Telecom’s wider strategy of offering so-called “converged” fixed and mobile services which it already does in other countries including France and Belgium.

“Orange Landline for Business will provide fixed services to existing and new Orange mobile business customers with a single point of customer service and call charges up to 20 per cent less than BT,” the company said.

The move is a direct challenge to BT, which is planning to push its Fusion phone, a mobile that switches to the fixed-line network when in range of a broadband connection to SMEs later this year, when the first Wifi handsets become available. Mark Odell

Wanadoo, France Telecom’s ISP, which is set to rebrand as Orange, is already offering consumers a “converged” service of broadband access, including internet telephony, and mobile. Orange however believes the SME market is not yet ready to embrace internet telephony as its primary form of communications.

The move comes as many fixed-line and mobile telecoms companies seek to expand their offerings by becoming “triple-play” or “quadruple-play” operators, offering fixed-line and mobile calls bundled with internet access and television.

Sky last year bought Easynet, the broadband internet service provider, while ntl, the cable operator which is the second-biggest provider of fixed-line phone calls after BT, is in takeover talks with Virgin Mobile.

Carphone Warehouse, the mobile phone retailer which also operates a mobile phone service called Fresh, in December ramped up its fixed-line business with the acquisition of Centrica’s OneTel and Tele2’s UK fixed-line business making it the third-biggest fixed-line provider.

James McCafferty, an analyst at Seymour Pierce, said attracting fixed-line customers away from BT was difficult. “BT is quite a big retainer. If you wanted to leave BT, you’d have probably done it by now.”

However Chris Alliott, an analyst at Nomura, said there was “some evidence that operators have been able to reduce churn with bundled offerings.” “If you’ve got TV, internet and telephony coming from the one provider, perhaps you’re less likely change.”