EBay division Skype and mobile phone group 3 have launched a mobile handset that allows Skype users to make free Internet calls to each other while on the move.

The companies said on Monday the new 3 Skypephone could also send free Skype instant messages, and that they hoped to sell several hundred thousand units worldwide in the fourth quarter of this year.

We are optimistic that if you look at one or two years, (we will sell) millions rather than hundreds of thousands, but in the fourth quarter (2007) we are looking at several hundred thousand worldwide, Frank Sixt, finance director of 3-owner Hutchison Whampoa, told reporters.

The phone is being launched in nine markets including Britain, Australia and Italy, with a roll-out into other countries under consideration.

In Britain, the phone will cost 49.99 pounds ($102.6) on a pay-as-you-go basis, and will be free for 3 contract users. It will be on sale in 3's stores on Friday November 2.

Sixt said the phone's non-Skype tariffs were the same as on its other phones, with call minutes and texts priced the same way, and the phone will have a special Skype button.

Skype is now truly mobile. This new handset lets you make free mobile Skype calls when you are on the move to other Skype users all over the world, Skype acting CEO Michael van Swaaij said in a statement.

He added on a conference call that he expected the launch to boost the group's 246 million-strong registered user base, as the service was now available to people without computers.

We think there will be significant interest from those who aren't on Skype as it is so easy to set up. You don't have to have a laptop, he added.

Skype was bought by EBay for up to $4.3 billion in 2005 as the online auction site gambled on the fast-growing popularity of the web-based call service, although it wrote down $1.2 billion from the value at the start of this month.

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