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Digital music service Spotify is in advanced negotiations with 3 to distribute its mobile application to the operator’s 4.4m subscribers.

3 is hoping a distribution deal will be agreed this month to let Spotify’s premium subscribers access the music service on their phones.

A variety of potential deployments are being considered, including pre-loading the app onto new handsets and making it available to download for 3’s existing subscribers.

The deal would be a valuable customer acquisition and loyalty tool for 3, which is the smallest of the UK’s mobile operators.

A source close to the negotiations said the operator had a history of working closely with digital service providers. “Conversations are taking place and we’re hopeful,” he said. “It might be hard for Spotify to find a fit with another operator because of its existing commercial agreements, such as O2 and Apple.”

Speculation has surrounded Spotify’s submission of its iPhone app to Apple last month, with some observers predicting it will be blocked because of fears it will cannibalise iTunes’ sales of digital downloads.

Similar fears of a negative impact on music sales at their own stores have been voiced by operator insiders, but 3 has a history of accepting internet services its rivals have barred from their networks, such as MSN Messenger and Skype.

Spotify went on the hunt for mobile app developers for the iPhone, Google Android and the more common S60 operating system in March (nma 19 March 2009).

Last week Orange launched a service with Universal Music which streams music via its voice network and is aimed at subscribers without high-end phones or data tariffs.

A Spotify spokesman confirmed it was currently talking to “a range of partners in the UK”.

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Published 5 August, 2009 by NMA Staff

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