Mobile music deal seeks to squash Apple

Mobile network operators and music companies are joining forces to make sure that Apple's domination of the download market is not extended to mobile music.

The groups have launched a mobile music service offering unlimited downloads for £1.99 ($5)a week with data costs included across Europe and the Asian markets. For £2.99 ($7.50) a week customers can also use a Mac or PC for downloads.

The MusicStation software has been developed by UK firm Omnifone and will be preloaded onto new handsets from Nokia, Motorola and others.

So far 23 mobile network operators have signed up, offering a potential subscriber base of 690 million users in 40 countries.

"Omnifone has a great opportunity, partly because Apple is doing exclusive deals with carriers and leaving others out in the cold," said Robin Bloor, founder of analyst firm Bloor Research.

"Apple is not willing to share its iTunes revenue with the carriers, and has only one device that is highly priced."

Under the terms of the deal record companies make the largest cut of the revenue, while network operators take a significant portion and Omnifone takes a small percentage.

Vodafone and Universal Music, the world's biggest network operator and music company respectively, have signed up to support the service.

"The real problem with the iPhone is its dependence on one platform, and on commercial terms that are aggressive and involve payments to the manufacturer for exclusivity," said Rob Lewis, chief executive at Omnifone.

"But this also involves handing over that content to Apple on a silver platter on the basis that the music is sold over Wi-Fi in the home through iTunes using Apple's billing system and hardware and not using the billing system of the operator."

The Omnifone software automatically organises music into the most listened to tracks, and includes messages about gigs and news for popular bands. The software also links to a mobile online community similar to MySpace.

"Universal Music Group International is looking forward to the launch of MusicStation," said Rob Wells, senior vice president at Universal's digital division.

"It is one of the most consumer friendly and secure platforms we have seen, and the worldwide potential of the platform and its ability to make music instantly accessible to consumers via their mobile phone is enormous."

The music comes with DRM software built in and locks up 24 hours after the subscription lapses, although it stays on the phone and can be reactivated.

When the phone runs out of memory users can still download new tunes, but the least listened to tracks will be deleted.

The first two networks to roll out the service will be Scandinavian firm Telenor and Vodafone partner Vodacom in South Africa.

Omnifone hopes to have all countries covered with active services by the time the Apple iPhone launches in Europe.

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