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MusicStation Goes to Asia

Hutchison 3G HK Ltd. in Hong Kong will be the first Asian mobile operator to offer Omnifone Ltd. 's MusicStation over-the-air music download service, but at a far lower price than European operators. (See 3 Signs Up MusicStation.)

The Hong Kong launch marks Omnifone's first mobile operator partnership in Asia and the third operator partnership after Vodafone UK in the U.K. and Telenor Group (Nasdaq: TELN) in Sweden. (See Vodafone Grooves to MusicStation and MEM Sizzles on the Riviera.)

And, as Omnifone likes to point out, MusicStation is a step ahead of Apple Inc. (Nasdaq: AAPL) in the Asia/Pacific region, which plans an iPhone launch some time next year in this region.

"We have been positioned as the mobile industry's answer to the iPhone," says an Omnifone spokesman. "The iPhone disintermediates [sic] operators from music download revenues. MusicStation uses mobile operators' data networks and incrementally increases revenue from existing pay-per-track services."

For the launch in the Asia/Pacific region, Omnifone has dramatically lowered the price of the service to counter piracy and entice users to pay for music downloads. Compared to paying £1.99 ($4) per week for unlimited MusicStation downloads in the U.K., and €2.99 ($4) per week in Europe, subscribers in Hong Kong will pay HK$12 ($1.55) per week for unlimited music downloads.

"You're competing with free in this region," says the Omnifone spokesman. "We created a new price point for this region to combat high levels of piracy and encourage legal consumption of music in Asia."

MusicStation has a library of more than a million tracks from independent labels, Universal Music Group, Sony BMG Music Entertainment, EMI Music, and Warner Music Group. The service comes preloaded onto certain 3G phones, or it can be downloaded from a mobile operator's portal.

Tracks are downloaded over-the-air to subscribers' phones. Subscribers are billed for their weekly subscription on their mobile phone bills and no extra data charges are incurred.

In Hong Kong, the service is available on 14 different 3G handsets, including Nokia Corp. (NYSE: NOK)'s 6120 and N95, and Sony Ericsson Mobile Communications 's W910i.

In the U.K., Vodafone plans to launch MusicStation next month. The service has been commercially available in Sweden from Telenor since June, but Omnifone did not provide subscriber data.

— Michelle Donegan, European Editor, Unstrung

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