Vodafone whets appetite for mobile Internet

Vodafone has begun offering new fees and features to stir demand for mobile Internet services as competition hits the company’s profits from voice services.

Two of the group’s largest subsidiaries, Germany’s Vodafone D2 GmbH and Vodafone Ltd. in the U.K., announced new mobile data offerings on Wednesday with subsidiaries in several other markets planning customized packages of their own, according to Vodafone Group spokesman Mark Street.

“Pricing for these new mobile Internet services will be on a market by market basis, and it will be up to each market to decide on features,” Street said. “But what I can say is that as a group, we’re looking at prices that are predictable and transparent and services that offer value for their money.”

The move comes as Vodafone, which has been facing tough competition from low-cost mobile phone operators, seeks new revenue streams to offset falling prices from its traditional cash-cow voice service. It has also been prompted by mobile Internet services, such as T-Mobile International AG’s Web n’ Walk, designed for quick, easy, and competitively priced mobile phone surfing.

As of July 15, Vodafone customers in Germany can subscribe to the new mobile Internet service, called “Handy 2.0,” available for a flat monthly fee of €9.95 ($13.44) .

The service uses the open-source Opera mobile phone browser, which formats content for easy viewing on small displays, according to Vodafone D2 spokeswoman Bettina Donges.

“Handy 2.0 will be like a PC experience,” Donges said. “You’ll be able to surf all around the Net with your mobile phone, the pages will be compiled fast, and they’ll be easy to read.”

The new flat-rate Internet offering, however, doesn’t apply to VoIP applications, according to Donges.

Vodafone will not support mobile VoIP service until it can guarantee quality service, Street said.

In addition, Vodafone has struck Internet partnerships with eBay, Google, YouTube, and MySpace.com to provide services specially tailored for mobile phones.

Customers access the Internet service through the Vodafone Live mobile portal. The portal service is included in the various bundled minute packages available from the German operator.

Initially, several handsets, including the Nokia N73 and N95, the Motorola V3 and V980, and the Samsung Zv60 and D900i, will support the Handy 2.0 service, but other phones will be added over time.

In the U.K., Vodafone is launching a similar service that takes Web pages designed for PCs and makes them easy to read on handsets. The Vodafone Mobile Internet offerings also includes partnerships with eBay, Google, YouTube, and MySpace as well as Yahoo.

Analysts see a couple of advantages to the partnerships.

By collaborating with these brands, Vodafone not only gives customers a better experience of using their Internet services on their phones but will also benefit from advertising revenue opportunities, according to John Delaney, principal analyst at Ovum Ltd.

One slight difference between the German and U.K. offering is the price: U.K. customers who sign up for a data pack pay £7.50 ($14.90 ) per month for 120MB of data, which is equivalent to four hours of viewing YouTube or up to 160 mobile Internet pages every day for a month.

Other customers are charged per kilobyte, up to a £1 per day for 500KB, with no additional charge unless the day’s usage exceeds 15MB.