iTouch deal with For-Side gives it edge on 3G rivals

The ringtones company, iTouch, yesterday signed a major licensing deal with a Japanese rival.

The ringtones company, iTouch, yesterday signed a major licensing deal with a Japanese rival.

The deal, with For-Side.com, allows iTouch, which provides ringtones, games and other mobile phone paraphernalia, to significantly expand its range. For-Side's database includes over 20,000 products for third-generation (3G) mobile phone handsets.

These phones have become mainstream in Japan and Korea but have yet to take off in Europe. iTouch said linking up with For-Side would put it ahead of its European rivals, which are still in the early stages of developing products for 3G phones.

As part of the agreement, For-Side has bought 18.25 million shares in iTouch at 29p each. This represents a £5.3m investment, and gives For-Side 4.7 per cent of iTouch's share capital. Shares in iTouch yesterday closed up nearly 2 per cent at 29p. The partnership will give the two companies greater power and economies of scale when brokering licensing arrangements from film and music companies.

"In a consolidating market, this agreement is an important strategic opportunity providing iTouch with access to For-Side's advanced content library together with future 3G know-how," Wayne Pitout, the chief executive of iTouch, said yesterday. "This agreement contributes significantly to iTouch's negotiating power when dealing with global media owners."

iTouch will use For-Side's investment to fund the acquisition of the Russian and Eastern European mobile content provider, Jippii Mobile Entertainment. The deal, announced in July, will give iTouch distribution in 26 countries, as well as a new internet portal.

Through For-Side, iTouch will gain exposure in the US. It recently bought Zingy, a US mobile services provider. iTouch also operates in South Africa, Ireland, Poland, France and Australia.