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Electronic commerce conducted via mobile devices such as phones and PDAs will take off over the next few years to become a $25 billion market worldwide by 2006, according to a study released Thursday by Frost & Sullivan.

By that time, mobile electronic commerce, or m-commerce, will account for 15 percent of the world's online commerce, according to a summary of the study.

According to Frost & Sullivan, several different market sectors will make up m-commerce, including:

• Automated point-of-sale payments (vending machines, parking meters, and ticket machines)
  
  
• Attended point-of-sale payments (shop counters, taxis)
  
  
• Mobile-accessed Internet payments (merchant WAP sites)
  
  
• Mobile-assisted Internet payments (fixed Internet sites using phone instead of credit card)
  
  
• Peer-to-peer payments between individuals
  
  

Of these, mobile-assisted Internet payments will account for 39 percent of m-commerce spending and peer-to-peer payments between individuals will account for 34 percent, the company says.

The benefits of m-commerce to consumers include convenience for booking and paying for tickets, and managing stock trading or financial transactions. Benefits for merchants and banks include reducing fraud and cash-handling costs, and an estimated 20 percent increase in sales caused by customers being able to make payments more easily and conveniently.

Consumers, merchants, and banks all benefit from the increased security of mobile phone-based transactions compared to online credit card payments, which remain a concern to many potential e-commerce consumers, according to the study.

M-commerce, for which the foundations are currently being laid, offers significant market opportunities for network operators, banks, credit card associations, manufacturers and many startups looking to claim a stake in the payment market, Frost & Sullivan says.