I have an Alcatel Onetouch Idol 3 that I purchased in January. It has static, breaks up and sounds muffled when I have my bluetooth on and wifi is on. If I turn my wifi off it works ok. I have tried 4 bluetooth and returned the Alcatel once. Has anyone else had this problem or does anyone have a solution? I am ready to cut my losses and purchase another phone.
Wi-Fi and Bluetooth both operate in the 2.4 GHz frequency band. As such, interference is to be expected; it's not your particular phone. Here is an interesting paper on it.
You could see if your home Wi-Fi router supports the 5.0 GHz band, and switch to using that exclusively. You could also try changing the Wi-Fi channel.