‘Free’ Blyk Mobile Phone Service to Launch in ’07

For young people, the idea certainly sounds tempting: If they’re willing to accept advertising on their mobile handsets, they can phone for free.

Blyk is an advertising-funded mobile phone service scheduled to launch in the United Kingdom in mid-2007, followed by other markets, the company said Thursday. The service will be aimed at consumers between the ages 16 and 24.

The venture is the brainchild of former Nokia President Pekka Ala-Pietila and Anntti Ohrling, chairman of Contra Advertising. Sofinnova Partners is one of its funders, in addition to several individual investors.

But details of the advertising-based business model are few.

“They’re very secretive about their plans,” said Sarah Harris, a senior analyst at Strategy Analytics in London. “I met with the company earlier this week and walked away with more questions than answers.”

Neither of the Finnish cofounders was available for comment Thursday, and a spokesperson for the company declined to provide details.

In a statement, the company did say its service has been under development since January, and that it is finalizing its offering with U.K. brand partners. It said it will offer advertisers a new way to interact with a young audience and collect real-time feedback.

One of the reasons for the secrecy could be competition; another could be concern about having the venture shot down before it gets started.

Blyk isn’t the first company to offer free mobile service in exchange for advertising rights, Harris said. Spotcast Communications launched an advertising-supported service in Hong Kong in 1999 but shut it down a year later.

Harris speculated that the service was canned because “only the most strapped-for-cash users were really adopting it with any eagerness—users who were not advertisers’ favorite people because, while they were happy to ‘play the game’ and receive and read the adverts, they were not responding to the advertising message by going out and spending money.”

Similar advertising-supported services were launched a few years ago for fixed-line phones, but “you really don’t hear anything about them anymore,” Harris said.

An advertising-supported service can work, she said, “but it must be finely balanced.” The number, type and length of ads are crucial criteria that could make or break the service.

“The reality of Spotcast’s advertising-supported mobile phone service is that it was very intrusive,” Harris said. “A lot of users really hated it after a while.”

-John Blau, IDG News Service (Dusseldorf Bureau)

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