Vodafone Group PLC, the world's largest cell phone service provider, has teamed up with Microsoft Corp. to let the 165 million users of Microsoft's MSN instant messaging service exchange messages with people using Vodafone cell phones.
The move shows that service providers are under pressure to team up with the big brand names from the Web to offer Internet-style services such as instant messaging and Web browsing on cell phones.
Until now, users of Vodafone's handsets have been able to exchange instant messages with only people using the Vodafone instant messaging service.
But Vodafone, of Newbury, England, said this closed system hasn't proved popular with its customers, who number about 120 million, mainly in Europe and Japan.
Vodafone rival T-Mobile, a unit of Deutsche Telekom AG, is going further. It said yesterday that it will set Google Inc.'s search engine as the default home page on the Web browser used on its high-end cell phones.
That gives Google some valuable real estate that may help it attract more advertisers to its search services.
T-Mobile's portal has been set as the home page on handsets distributed by the service provider, based in Bonn, Germany, with operations in Europe and the United States. "But Google is the most accepted way of entering the Internet," said T-Mobile spokesman Philipp Schindera.
Vodafone isn't prepared to go that far; the instant messaging service on its handsets will still be branded with the Vodafone name. The company's deal with MSN isn't exclusive and doesn't prevent Vodafone from making similar arrangements with other big instant messaging providers, such as Yahoo Inc. and America Online Inc.
Instant messaging has several advantages over text messaging, a well-established feature offered by most cell-phone-service providers.
Instant messages typically arrive faster than text messages, and users can see if a contact is online and available before they send a message.
Both MSN and Vodafone plan to market instant messaging by letting customers buy bundles of messages that can be sent to and from cell phones. The companies wouldn't say how much they plan to charge, but Guy Laurence, Vodafone's global consumer marketing director, indicated rates would be cheaper than text messages for customers buying big bundles.
Laurence said the new instant messaging service, which will launch in Italy, Spain and the Netherlands this summer, may mean some Vodafone customers send fewer text messages, but he said he is confident Vodafone's overall revenue will increase. "We think we can make one plus one equal three," added Brian Arbogast, a vice president at MSN.
But the companies acknowledged that the cost and the small keypads on cell phones means handset users are unlikely to enter into the kind of lengthy rapid-fire instant messaging exchanges that are common among PC users.