Flat-Rate Mobile Phone Music Service to Compete With iPhone

A U.K. startup hopes to compete with Apple Inc.'s new iPhone by offering a flat-rate music service that can run on most of today's mobile phones.

Omnifone Ltd. launched on Thursday its MusicStation service that allows mobile phone users to download as many music tracks as they want for ,2.99 (US$3.97) per week. The company previewed MusicStation in February at the 3GSM World Congress in Barcelona.

The Swedish mobile phone subsidiary of Norwegian telco Telenor ASA is the first to offer the MusicStation service. More than 30 operators in Europe, Asia and South Africa have signed up to offer the service.

To use MusicStation, users must have handsets preinstalled with the application. "MusicStation runs on any Java and music-enabled device," said Omnifone spokesman Tim Hadley. "We're talking about 75 percent of the phones currently available on the market."

The company plans to have more than 100 million MusicStation-enabled handsets within the next 12 months.

Omnifone has developed software that allows its application to be ported to the many different types of Java used on mobile phones, according to Hadley.

One of the main benefits of MusicStation is quick and easy navigating and downloading -- unlike many of the carrier music portals, based on WAP (Wireless Access Protocol) technology, which can be time-consuming and difficult to browse, according to the spokesman. "The application is very comparable to an MP3 player user experience," he said.

Downloads to mobile phones over 3G (third-generation) mobile phone networks can take between 30 seconds and one minute, all of which can happen in the background. The service also runs on GPRS (General Packet Radio Service) networks.

Omnifone has signed licensing deal with several large music companies, including EMI Music, Sony BMG, Universal Music Group and Warner Music International. "We're starting with over 1 million tracks," Hadley said.

DRM (digital rights management) technology protects all of the music.

The mobile MusicStation service includes several features, such as messaging and the ability to share playlists and tracks.

Over the next few months, the company plans to offer a MusicStation desktop application. For an additional ,1 per month, customers can have all of the tracks downloaded to their mobile phones automatically download to their PCs when they log on to the portal service, according to Hadley.

Operators, music companies and Omnifone will split revenue generated by MusicStation.

Apple announced this week that iPhone users will need an account for its iTunes Store music service before activating the device. The iPhone debuts in the U.S. on June 29.