Cowdry told The Times that O2's broadband customers complained about their fixed line providers' poor customer service and hidden costs.
The new service will initially be marketed in packages to existing broadband customers, with discounts for those taking all three mobile, broadband and fixed-line services.
But customers will still need to have a BT landline.
O2 claims it will offer "some of the most competitive pricing in the UK". Its mobile customers will be able to get O2's standard broadband package and evening and weekend phone package for £17 a month, including line rental.
The move means O2 will be taking on its former parent company BT and number two mobile player Vodafone, which also offers a home phone service with its home broadband, through its Vodafone At Home partnership with BT. Orange also offers a phone service for its large broadband customer base.
It is also arguably a sign that saturation in the mobile sector is forcing the market leader to look for growth elsewhere.
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