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O2 believes the service will steal a march on rivals' plans, notably a similar initiative from BT called Bluephone, which launches next year.

The service, called O2 Home, goes live next month and is the company's main initiative to woo consumers during the crucial pre-Christmas period.

Customers register their home post code to sign up to O2 Home, which uses intelligent networking to automatically route calls made at home to a cheaper rate.

O2 is supporting O2 Home with a £5m ad campaign by Vallance Carruthers Coleman Priest, forming the key plank of an overall £11m fourth-quarter ad campaign.

As well as TV, press and outdoor, the O2 Home campaign will include a strong ambient element, appearing on take-away packaging. TV ads will feature falling telegraph poles.

O2 head of brand and marketing communications Suzie Moore said: "O2 Home is our 'headline shout' for the Christmas season and is all about increasing use."

She said research showed 40% of 16- to 25-year-old customers don't have a fixed-line phone, while 20% of all customers make more than half their mobile calls from home.

O2 Home will be available to pre-pay customers in a choice of two 'bolt-on' options to their existing price plan.

O2 Home 250, restricted to calls made from the home to landlines and other O2 phones, costs £4.99 a month, with calls at 2p a minute.

O2 Home 100, for home-based calls to any network, costs £9.99 a month with calls at 10p a minute.

O2 is targeting the business community with its 'Best for Business' campaign, following a heavyweight campaign to promote O2 Active, its data services package to challenge Vodafone Live!

O2 is the UK's fourth-biggest mobile operator - just behind T-Mobile - with 12.3 million customers.