Mozilla Foundation, creator of Firefox Internet browser, said phone makers ZTE and TCL Communication Technology will roll out the first Firefox phones using Qualcomm's Snapdragon processors in early 2013.
Broad support from telecom companies and handset makers is crucial for any new smartphone platform to take off in a market increasingly dominated by Google's Android software, which has a market share of around 60 percent.
Phone companies have tried before to create platforms to combat the growing dominance of Android, but have so far failed as they had to create from scratch the ecosystem around platform: developer tools, applications, developer community.
The sector has seen the demise of many rival platforms over the last few years, including operator-led initiatives like LiMo, but also Palm's WebOS and Nokia's Symbian operating system which failed to win enough support from developers and device manufacturers.
The new platform aims to overcome the problem by tapping into a large community of web developers and most of the apps are already created on HTML5, the preferred standard for creating mobile browser content.
The free Firefox platform will put pressure on Microsoft and Google, which themselves are trying to attract handset manufacturers. But Microsoft collects licensing fees of up to $20 per Windows phone and also collects royalties from makers of Android devices.
TCL, which uses Alcatel brand for its phones, and ZTE are both hoping the new Firefox platform will help make up for their late entrance to the booming smartphone market.
The new platform combines HTML5 with some of the core elements of Linux technology, cutting the need for a separate operating system and enabling fast rollout of new phone models.
Cutting some layers of a traditional operating system allows the new platform to be used on smartphones with lower processing power and with lower cost materials.
Telefonica has said the phone price will be significantly cheaper than the low-end Android models, meaning Firefox phones can be priced at levels around $50 excluding operator subsidies.
This compares with prices around $200 for most smartphones.
"Success for any platform is dependent on the virtuous circle of scale and momentum. Manufacturer and operator commitment is essential to driving developer support and consumer interest which in turn strengthens demand for the platform," said Geoff Blaber, analyst at CCS Insight.