By Jennifer Schenker

BARCELONA – The mobile industry will on Monday announce its answer to Apple’s new iPhone, an all you can eat over-the-air full track music download service called MusicStation, that will work across mobile phones from most manufacturers and be launched by mobile operators in 40 countries around the globe.

All four major music labels have agreed to release their digital music catalogs to MusicStation and 23 mobile operators in Europe and Asia representing some 690 million customers have already committed to using the service, said Rob Lewis, the 37-year-old British serial entrepreneur who is behind the service. Mr. Lewis and three partners are the co-founders of London-based Omnifone, a U.K. start-up which has been operating in stealth mode for four years.

Omnifone has chosen the 3GSM conference in Barcelona, an annual industry trade fair, which is expected to attract some 60,000 visitors this year, as its coming out party.

It is billing the MusicStation as the mobile industry’s answer to the iPhone, a new Apple phone that is expected to go on sale in the U.S. this June for $599 and appear in European stores in November.

The iPhone, which is controlled by a large touch screen, plays music, surfs the Internet and runs the Mac OS X operating system, has served as a catalyst for the mobile industry. To date, most mobile operators have failed to captivate consumers with their mobile music offerings, most of whichare complicated, expensive and slow.

Most people still store their music libraries on other devices, to the chagrin of mobile operators who are all desperately searching for ways to make more money from data services as voice revenues decline.

Omnifone claims its user interface and functionality are virtually identical across all manufacturer’s handset models, providing the same user experience on every handset. And, operators have taken the unusual step of agreeing to brand the service MusicStation no matter who is offering it and to promote the service heavily, even taking out TV ads to rival Apple’s publicity campaigns.

By arming the approximately one billion new mobile handsets sold each year with a pre-loaded, consumer friendly, and affordable way of downloading music, Omnifone says it believes it can give Apple a run for its money in digital music.

“We will get there first in almost every territory,” says Mr. Lewis.

The first operators to announce rollout agreements for MusicStation will be Telenor, which has some 80 million customers across the globe and Vodacom, global operator Vodafone’s operator in South Africa.

Four more networks will be launched across major territories in Western Europe and Asia Pacific in the second quarter of 2007, Mr. Lewis said.

Unlike the iPhone, which currently requires users to download music via their PCs, users of MusicStation can download tracks over the air, giving users instant access to new music at any time, irrespective of their location. And, unlike Apple’s initial release of iPhone, MusicStation will work on both 3G and most 2.5G phones, covering about 75 percent of all mobile phone handsets sold in Western Europe and about 50 percent of those sold in Asia Pacific, with both Java and Symbian versions available at launch, Mr. Lewis said.

The MusicStation service enables users to search for music, download and play music on their mobile and Mac or PC, create, manage and share playlists and tracks with the MusicStation community and view the latest music industry news.

MusicStation automatically stores a user’s favorite tracks on the phone’s internal or removable memory. When the memory on the phone is full and a user downloads a new track the song that has not been played for the longest time will be deleted.

Downloaded MusicStation tracks and user playlists are also stored on the operators’ networks so that if a mobile is stolen, lost or upgraded, the replacement handset will automatically restore the same music experience the first time MusicStation is switched on.

Operators will sell MusicStation as a subscription service to access music from all the major labels and independents. Pricing in the U.K, will be ₤1.99 per week for unlimited downloads with European pricing set at €2.99 per week. A premium service will offer unlimited download for a subscriber’s mobileand Mac or PC desktop for ₤2.99 per week in the U.K. and €3.99 per week across the rest of Europe.

The service is expected to boost the revenues of handset manufacturers, mobile operators and the music industry.

Although the software that powers MusicStation can be downloaded over the air, the user experience is better if it comes pre-loaded, Mr. Lewis said.

For mobile handset makers the idea is that when European or Asian consumers walk into a mobile phone store and ask for an iPhone the salespeople can say they don’t have it but can offer a whole range of new phones, including some of the cheapest, that will give them an iPod-esque type experience. The hope is this will drive new handset sales in saturated markets.

Mobile operators, who today make very little money from music services, also stand to benefit. Vodafone, for example, offers music to less than a million of its customers who use 3G and these customers only download an average of six tracks per year, says Omnifone CEO Mr. Lewis.

The idea is to get the majority of customers using the service every week. The volume is expected to add zeros to the bottom line of mobile operators.

Music labels also see this as a positive step, because it gives them new avenues for selling digital music in addition to Apple.

“The worldwide potential of the MusicStation platform and its ability to make music instantly accessible to consumers via their mobile phone is enormous,” Rob Wells, senior vice president, digital, for Universal Music Group International, said in a prepared statement. He went on to call MusicStation “one of the most consumer friendly and secure platforms we have seen.”

Omnifone offers its own proprietary digital rights management system. Integrated billing and access to music catalogs is expected to be aided by the announcement Monday of an agreement with a Nasdaq-listed music aggregator that it refused to name on Sunday.

Chris Coffman, a wireless analyst in the London office of Informa who had been prebriefed on MusicStation points out that other start-ups, such as the U.S.’s Groove Mobile, have tried similar initiatives. These companies have struck deals with music labels and promised a good user experience but the services “haven’t really jelled together so when someone comes along and says ‘well we have it all’ I am somewhat skeptical.” Mr. Coffman says.

Still, says Mr. Coffman, Omnifone could have a late mover advantage. One of the main reasons that previous attempts failed is that operators didn’t price and market the services correctly.

With the iPhone pushing the industry to react, Omnifone may have gotten its timing right, Mr. Coffman said.

Analysts say subscription services have not worked well to date but that could also change.

The ability to migrate between different mobile devices and between different operators and take your content with you is pretty appealing,” said Matt Hatton, a wireless analyst with The Yankee Group tech consultancy. “The price point for the service is also pretty reasonable,” he said.

But “the big question is whether they can sell it to consumers and what the user experience will be once this is actually running live with a fair number of users,” adds Jonathan Arber, a wireless analyst in the London office of Ovum, another tech consultancy.