A hostess holds a prototype of the Google Android mobile by British chip designer ARM during the Mobile World Congress in Barcelona on February 11, 2008. [File Photo: Reuters/Albert Gea]

The first mobile phone to use Google Inc's Android mobile operating software will cost US$199, the Wall Street Journal reported on its Web site on Wednesday.

The phone, which features a slide-out keypad, will be sold by Deutsche Telekom's T-Mobile USA unit, which plans to unveil the device at an event in New York on September 23.

AT&T Inc, the only U.S. operator selling Apple Inc's iPhone, set the price of the latest version at $199 in July, setting a benchmark for smartphones that can surf the Web, manage email and other multimedia features.

The Journal, citing people familiar with the matter, said T-Mobile USA plans to release new data service plans in conjunction with the Google phone that will be "aggressively priced."

Google and T-Mobile USA declined comment on the pricing for the phone.