3UK and Spotify close to mobile music service agreement

The UK's smallest, but most innovative, mobile operator - 3, is close to agreeing a deal to distribute Spotify's streaming music service to the operator's 4.4 million subscribers. If the negotiations are successful, then 3 could be seen as again out manoeuvring its much larger (and slower moving) UK competitors, and gaining Spotify's free music service to use as a customer acquisition and loyalty tool.

According to insiders, 3 is considering a variety of potential deployments for Spotify, including pre-loading the app onto new handsets and making it available to download for 3's existing subscribers.

The UK operator has a track-record of working closely with digital service providers, and perhaps recognises that it might be troublesome for Spotify to establish a partnership with another operator because of their existing commercial agreements with other music service providers, such as O2 and Apple. Ongoing speculation has surrounded Spotify's submission of its iPhone app to Apple last month, with some observers predicting it would be blocked because of fears it will cannibalise iTunes' sales of digital downloads.

An indication of Spotify's mobile music intentions became apparent in March this year when it initiated a campaign to look for mobile apps developers for the iPhone, S60 and Google Android platform.

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