The price of phone calls is set to fall dramatically thanks to a groundbreaking development that will enable any regular phone to make calls using the internet.

Charges are expected to drop by as much as quarter from early next year, and when the system is more established it will cost the same to call Australia and Aberdeen.

The breakthrough depends on a technology called ENUM, which converts any phone number into an internet address. Other phones can then find and connect to this number in the same way that a browser finds a website.

This removes a major barrier to the mainstream use of internet phone calls. In the past, web-based systems have been unable to find the numbers they require, a job normally performed by the telephone exchange.

"Eventually there will be no concept of international calls and the need for mobile roaming could disappear entirely," David Groom, vice president of the Amdocs telecoms consultancy, said. "Calls will become free as part of and internet connection."

If, as expected, Department of Trade and Industry approves the roll-out for early 2007, a majority of calls will be made via the internet within five years, analysts say.

Domestic mobile calls are also likely to be affected as wi-fi hotspots become more widespread, enabling phones to send calls via the internet while on the move. The whole of Norwich, large sections of the City of London, and 99 per cent of Cornwall are already wi-fi zones.

Skype, one of the most popular systems among consumers, only supports true web-based calls between registered customers, who must use headsets and computers to conduct the call.

A facility called SkypeOut lets people call standard telephone users, but this diverts calls to the existing telephone network for the ‘last mile’ of each call, between the local exchange and the home, and incurs charges for doing so.

ENUM allows users to sidestep the exchanges – and the phone companies – entirely. "You won’t need to use telephone companies to find the person you’re calling anymore," said Jay Daly, a consultant with Nominet, the .uk domain name registry, who has worked with an industry group developing ENUM. "It’s the equivalent of opening Skype up to everyone."

"We are still some years from being able to do away with ordinary phone networks but this technology is a huge step in that direction," he added.

Many obstacles remain, and Mr Groom said that it would take some time before a system of registering numbers is adopted. "Because the use of telephone numbers is regulated both globally and within each country, the process of creating and delegating these domains requires the involvement and approval of regulatory bodies," he said.

Phone users may also have to put up with some of the risks and inconveniences of the internet. "It’s not without problems," Mark Main, senior analyst in broadband services at Ovum, said. "There are privacy and security issues. Spam, for instance, could now be directed at phone numbers."

"But there will be a significant reduction in the cost of voice calls, perhaps 25 per cent," he added. "You'll soon just pay for a bundle of broadband access and voice calls will be part of that."

So far the technology has been introduced only in Germany and Austria, but British phone companies are expected to start using it from early next year, as soon as the industry reaches a consensus on how it should be implemented.

Initially, ENUM will be used mainly by existing phone companies to reduce the cost of carrying customers’ calls, but in time individual use of the technology will bring other benefits.

Customers will be able to sign up for a "number for life", that will follow them from home to home throughout the world. The system also allows calls to become more sophisticated. For instance, if there is no answer at a landline, the caller could choose to be redirected to a mobile number or e-mail inbox.

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