With mobile penetration rates poised to reach saturation point, telecommunications companies are tailoring their individual service offerings so they can lure and retain customers. However, some players are betting on the success of independent content provision.

The Australian Mobile Telecommunications Association (AMTA) has quoted Telstra CEO Dr Ziggy Switkowski as saying the number of mobile users in Australia would reach 15 million by the end of 2003.

"We expect to get to more than 100 percent penetration over the next few years," Switkowski said. That's more than one mobile network connected device for every Australian -- a big call, but some reports indicate penetration rates in Taiwan have already hit 107 percent.

The latest generation of Java-enabled mobiles with large memory capacity has introduced a new market -- the opportunity to sell content for mobile phones. People are now looking at creating products to use on your mobile rather than just finding new ways to use the phone.

"The way it's evolved is for carriers to keep a tight grip on the content you can get over their networks," Jason Ross, analyst at AMR Interactive told ZDNet Australia  . This certainly applies to the next generation of services from the mobile carriers -- Telstra Mobile Loop, Hutchison's 3 and Vodafone Live -- which have attempted to lure customers with the promise of a large range of content and services on their network. However, if you're a Telstra customer and you want a product offered on Vodafone Live, tough.

"The Internet is about niche marketing and that drives adoption of this kind of market rather than having a portal that has everything," said Ross, indicating the Internet and mobile markets are very similar. "One of the lessons we learned from the Internet is that people want to go to a portal, and then leave. Not be trapped there."

BlueSkyFrog has offered ringtones and logos for mobile phones since 1999, using a system of "Bugz" which can be purchased or won after joining the site. In January the company launched an SMS-based quiz game called "Battle of the Sexes" which pitches two people to answer six questions. According to Steve Watson, general manager of Portals & Entertainment, 14,500 now regularly play the game, with one person clocking up 490 games at $2 each.

Last week the company launched Java games for download using the same system as ringtones and logos. The games cost AU$12.50 in Bugz and the average mobile can house four to five games, according to Watson. He expects the market to take off, saying that there are around 500,000 people in Australia with GPRS enable phones, and that would only increase.

The latest company to provide mobile content in Australia independent of the carriers is the newly launched NudgeMobile, which focuses on selling games to be downloaded to mobile phones.

"In the months when NudgeMobile was available in the UK and not in Australia we had hundreds of enquiries from Australian customers asking when it would be available here, and when they could get it," Andrew Cantle, who heads up NudgeMobile, told ZDNet Australia  . "The latent desire of Aussies to compete is going to accelerate that."

Cantle also said that mobile gaming is encouraging women to buy games, with 30 percent of Nudge sales going to girls, while the proportion of console sales to females are still "around two percent".

A recent survey of around 1,000 mobile users by AMR Interactive found that 55 percent of Australian mobile users were aware of the ability to download mobile games to their mobiles, but only five percent said they were "very interested" in doing so. That small percentage equates to around three quarters of a million customers.

Ross said that he hadn't seen independent mobile content providers in Australia, and although he would like to see a significant market evolve, did not think it would happen anytime soon.

"The licensing agreement and how it is paid for is critical," said Ross, saying that consumers preferred to buy things outright than lease them. "Consumers [also] really like to see things on their phone bill, they don't like to pay separately."

NudgeMobile sells the games for AU$15 outright, with only one game -- the first multiplayer game they offer -- having a time limit imposed. The amount is paid via a premium 190 number, which warns users the game costs AU$15 and then instructs them to enter the game code and the mobile phone number to which it is to be sent.

A text message including a WAP link to the game is sent to the mobile, and the user then downloads it. The company will use premium messaging as a payment system when it is introduced later this year.

The mobileYouth 2003 report issued by W2F shows that youth in the Asia Pacific region currently spend almost 14 percent of their total leisure spending on mobile products (SMS, MMS, Mobile Java Gaming and Ringtones) each year, an this is predicted to increase to over 16 percent by 2006. That equates from an increase of around AU$10 billion this year to over AU$13 billion by 2006.

Despite this, most people are currently focussing on services, viewing m-commerce as a way to make life easier for people. For example, business student Andrew Grant is currently exploring ways to provide secure and easy bill paying to people using mobile phones.

"People are getting lazier," Grant told ZDNet Australia . "I've spoken to a lot of people about it -- if you had a pile of bills in front of you and you didn't want to use the Internet, would you pay by SMS?" He said the responses have been positive, but there are significant issues which need to be addressed before the technology can be brought in.

Australian mobile users are interested in mobile banking, with the AMR Interactive survey showing that although only 38 percent of mobile users were aware of the concept of banking using their mobile phone, nine percent were "very interested" in using the technology.

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