Facing the music hasn't been much fun for the world's mobile operators. They were looking to mobile music to drive growth in the use of data services and counteract sagging voice revenues. But first, Apple (AAPL) upset the apple cart by permitting songs to be downloaded easily from PCs to portable devices on both the iPod and the iPhone, circumventing the mobile broadband networks operators nearly went broke building. Then, in December, Nokia (NOK) announced that later this year high-end Nokia phones will come with a built-in service offering unlimited downloads of songs for a year (BusinessWeek.com, 12/4/07), changing the rules of engagement with mobile operators and throwing the market into further disarray.
Now a British startup is offering mobile operators and Nokia rivals a way of fighting back by providing unlimited music over handsets while encouraging the traffic to stay on third-generation (3G) mobile networks. On Feb. 12 at the Mobile World Congress in Barcelona, Omnifone, a British startup formed in 2003, which launched an "anti-iTunes" service last June with operator partners (BusinessWeek.com, 6/13/07), announced it is adding hardware to the formula, with prelicensed music phones. Korean giant LG Electronics is the first manufacturer to sign up for Omnifone's MusicStation Max program, with the first LG touch-screen 3G MusicStation Max handsets due to be released in the first half of 2008.