Telecom groups plot search plan to rival Google & Yahoo!

A consortium of some of the world's biggest mobile phone operators is planning a mobile-phone search engine to take on Google and Yahoo! in the emerging mobile search market.

To work on the project, the European telecoms giants including Vodafone Group, France Telecom, Telefonica SA, Deutsche Telekom AG, Hutchison Whampoa, Telecom Italia SpA and one American network, Cingular Wireless LLC are meeting for high level talks at the 3GSM World Congress in Barcelona next week.

The talks at the mobile industry's biggest annual trade show will detail how the networks can create a mobile phone search engine to challenge US search giants, Google and Yahoo!

"There is a big play in mobile search that we need to be part of, and we are exploring those options at a very high level," said an executive from a U.K. telecom, who requested for anonymity.

The European telecom companies have been facing declining revenues as calls become cheaper and most networks are trying to find ways to make more money without having to increase prices in the long term. The falling call revenues are driving network operators together to compete against Google and Yahoo! search engines.

The consortium, which has a combined user base of 600 million mobile phone users worldwide, with more than 20 per cent of subscribers in the UK who are expected to have access to mobile internet at broadband speeds by the end of 2007, is determined to secure a large slice of the lucrative search advertising market.

According to the most recent data provided by the Mobile Data Association, the number of UK mobile phone subscribers accessing the internet on their mobiles has been growing continuously and reached 15.9 million average users in December.

Research and marketing experts Informa Telecoms & Media expect that by 2011, just under half of all mobile subscribers worldwide will use mobile browsing. They forecast that the mobile advertising market will jump to more than $11bn in 2011 from less than $900m last year.

The latest move by the European telecom giants has come as a surprise to Google and Yahoo!, which already have struck deals with mobile operators and handset manufacturers.

However, the mobile industry believes it can retain a greater share of advertising revenues by developing its own search service.

Mountain View, California based Internet search giant, Google has already entered into deals with Vodafone, T-Mobile, Hutchison's 3 and China Mobile. Its service also comes pre-loaded on handsets made by companies including Samsung.

Google has not yet started generating revenue from its mobile search engine as it hasn't started selling sponsored links to advertisers. However, trials are in progress and the service should become fully commercial this year.

Headquartered in Sunnyvale, California, Yahoo! has until now signed up Vodafone and 3, and has already started featuring sponsored links.

The four big players in Britain, France Telecom owned Orange, O2 of Spain's Telefonica, Deutsche Telekom's T-Mobile and Vodafone, will all be represented at the 3GSM conference.