LG to ship full music-access phone before Nokia

By Tarmo Virki

BARCELONA (Reuters) - LG Electronics will start to sell mobile phones in few months time giving consumers full access to free music via Omnifone's MusicStation download service, UK-based Omnifone said on Tuesday.

LG's first full-access music phone is set to hit the market months ahead of a similar offering from the world's top cell phone maker Nokia, which unveiled its plan to start selling phones with free music access in December last year.

"Nokia's announcement was a wakeup call for many, especially in the music industry," said analyst Paolo Pescatore from CCS Insight.

Vivendi's Universal Music, the world's largest music label, has agreed to license its music for Omnifone's MusicStation Max program and for Nokia.

While Nokia is offering free access to all the music for 12 months, telecoms operators may charge extra for Omnifone's music program within their data packages.

Omnifone has licensing agreements with all the major music labels and offers music services through carriers including Vodafone and Hutchison.

Such unlimited download models could offer a shot in the arm to the music industry, which is struggling to find ways to make up for falling CD sales -- something that pay-per-track online stores like Apple's iTunes have so far failed to do.

"The music industry has understood that this model alone is not big enough to outweigh the decline in CD sales," said analyst Mark Mulligan from Jupiter Research.