Microsoft is mulling the idea of providing Windows RT and Windows Phone to device makers for free in the near future, according to a report from The Verge. The report also says that the free versions of Windows RT and Windows Phone would get delivered along with the much talked about Threshold update, a project aimed to further unify Windows, Xbox One and Windows Phone.

Microsoft generates a decent amount of revenue through the licensing fees that OEMs have to pay for using its operating system on their devices. But, with the acquisition of Nokia, which ships more than 80 percent of Microsoft-powered handsets, the company's ability to make licensing money has dried up.

The report says that the Redmond-based company would compensate the loss of licensing money through ad-based revenue from Windows 8 apps and Bing search results. The company would also make sure that the number of subscriptions to its services like SkyDrive, Office, and Skype goes up.

The idea to provide Windows Phone and RT for free is under serious consideration by the Microsoft's OS chief Terry Myerson, but a final decision has not yet been taken.

Google is currently the biggest player in the mobile OS market. Its Android OS is available free of cost to phone manufacturers – though they pay licensing fees to Microsoft. If Microsoft goes ahead with the decision, the company would have a level playing field to compete with the Mountain View-based rival.