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Last Updated: Monday, 30 June, 2003, 15:53 GMT 16:53 UK
RealNetworks bags Vodafone deal
RealNetworks webgrab

Software group RealNetworks has fought off arch rival Microsoft by winning a deal to supply its video and audio streaming products to Vodafone.

The agreement will see Vodafone use RealNetworks software for its streaming services, including video, music and news updates, supplied through Vodafone Live.

RealNetworks described the deal as "the plum account", offering it access to the millions of customers signed up to the world's biggest mobile phone operator.

Vodafone has about 119 million mobile phone customers and claims one in every 100 people in the world has one of its phones.

A spokesman for the group also suggested RealNetworks' coup would make it more difficult for Microsoft to now get a foothold in the lucrative mobile market.

"It will certainly be an uphill battle for Microsoft to get into the mobile industry," he told BBC News Online.

Lucrative potential

No financial terms of the deal were disclosed but Vodafone is buying the software for a flat price, then paying licence fees for the server depending on how many customers take up the service.

Dan Sheeran, RealNetworks' senior vice-president, said the partnership had "the potential to be very significant over the long term as these services grow".

The uptake of 3G services has been slower than many software providers would have liked, but RealNetworks' services are also offered on 2.5G , or GPRS.

"The advantage of Vodafone is that it doesn't rely on 3G," Mr Sheeran told BBC News Online.

He added that RealNetworks already had deals with Nokia, the number one network provider, and with the infrastructure leader Ericsson.

"This puts us in a deeply strategic position," said Mr Sheeran.

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