Calypso Wireless has signed a $500 million, 3-year agreement with China Telecom to supply them with technology to allow mobile phone users to switch to a VoIP link and back again, via Wi-Fi.

Calypso will provide a complete infrastructure solution and is offering a deal in which domestic users will have a rebate on their broadband bills if phone users use their open WLAN for calls.

The Calypso/China Telecom deal will see shipments begin in early-2004, possibly in March 2004. The initial production shipments of Wi-Fi access points, phones and the Media Gateway Controllers linking them will begin in Q1 or Q2-2004.

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