Nokia expects operators to sell "free" music phones

By Tarmo Virki

HELSINKI (Reuters) - Nokia is confident its phones with free access to music will also be sold by telecom operators, with the timing now up to the carriers, Nokia's Internet services chief told Reuters.

Last week Nokia said it would kick off of its "Comes with Music" offering in Britain, signing a deal with retailer Carphone Warehouse to offer the first model to pre-paid clients.

Deals with operators are usually more beneficial to phone makers as operators subsidize phones to boost demand and win new clients, hoping to win the subsidy back in monthly bills.

But many operators already run their own music stores and create additional revenue and profit from those.

Niklas Savander, the head of Nokia's Internet services unit, said he expected operators to take "Comes with Music" phones into their portfolios, but when asked if this would happen in time for Christmas sales, he said it would depend on the operators.

"The dialogue we are having with operators on services is very pragmatic: to better optimize profitability and to attract more users," Savander told Reuters in an interview.

"In the end we have the same goal: we need to find ways to convince the consumer to incrementally spend on their phone. The issue with music is a special one as many operators already have their own music offering."

Nokia's "Comes with Music" will differ from other packages on the market as users can keep all the music they have downloaded during the 12 months.