Forget Sirius, forget XM.. there's Sprint Radio

Sprint launches mobile telephone music service.

By Sinead Carew
19 December 2004
(c) 2004 Reuters Limited

NEW YORK, Dec 20 (Reuters) - Sprint Corp. (FON.N) on Monday said it was launching several music channels for mobile telephones in the first of what is expected to be a flurry of music services from U.S. wireless providers.

Sprint, the No. 3 U.S. mobile service provider, which has agreed to acquire Nextel Communications Inc. (NXTL.O) next year, said it would deliver six audio channels and a video news channel to the Sanyo MM-7400 mobile telephone it began selling in November.

The streaming audio service, which Sprint likened to satellite radio for phones, will cost an extra $5.95 a month for customers who pay $15 a month for Sprint's Vision package for data services such as mobile Web browsing.

Music Choice, a music network partnership of several major cable and technology companies, will provide channels ranging from hip-hop to country to rock, as well as a video channel featuring music industry news and up to five interviews a day.

The service is designed to encourage consumers to use their phones for more than communicating, said Jeff Hallock, Sprint's marketing vice president. He said the company does not view the offering as competition for satellite radio or portable music players.

"It's for somebody who doesn't have an alternative, but they do have their phone with them all the time," said Hallock, who expects the service to attract young audiences with subscribers ranging from teenagers to people in their 30s.

Wireless providers around the world are continually looking for new ways to grow, as phone call prices decline and market growth slows.

The success of musical ring tones, which generated a $3.5 billion global market in 2003, and the popularity of portable music players has lead to forecasts that services delivering entire songs to phones will be the next big thing in wireless.

Hallock did not disclose sales targets, but said Sprint is expecting mass market demand for the service once it offers a variety of inexpensive handsets that support music streaming. It plans to widen its music capable handset range next year.

Clint Wheelock, an analyst with In-stat/MDR, said it was too soon to forecast the value of the mobile music market, but noted Sprint's offering would be followed by several rival services in first half of next year.

"It's a very key step in the development of a broader music portfolio, but this is not the only answer," said Wheelock of Sprint's service.

The development of high-speed mobile networks that let customers wirelessly download songs to save on their phones will be crucial to making mobile music services popular among consumers, he said.

Sprint does not allow consumers to save songs on their phones, but it has plans for such a service next year. It also expects to begin selling high-speed services in 2005.

Music Choice is a partnership of subsidiaries of Microsoft Corp. (MSFT.O), Motorola Inc. (MOT.N), Sony Corp. (6758.T), EMI Music and several U.S. cable providers, including Comcast Corp. (CMCSA.O) and Time Warner Inc. .

SOURCE: Reuters Limited