Finnish startup Blaast taps operators in app race

HELSINKI Tue Jan 24, 2012 10:04am EST

HELSINKI (Reuters) - Finnish technology startup Blaast unveiled on Tuesday its first major deal, signing up Indonesian operator XL Axiata (EXCL.JK), and said it aims to tap more carriers to grab a share of booming mobile application market.

Blaast has built a platform to distribute apps to mid-range cellphones, enabling carriers to sell more data packages bundled with free access to applications.

Operators around the world are seeking ways to grab a share of booming mobile apps market, already a $15 billion industry, dominated by Apple (AAPL.O) and Google (GOOG.O) stores.

"We have met tens of operators and almost all of them want to launch our services," said Blaast Chief Executive Joonas Hjelt.

Blaast applications are run in the operator's data centers, lowering demand for hardware on the phones themselves, and enabling usage of apps on the more basic models. The startup gets a cut from revenues created.

"The concept sounds good," said analyst Paolo Pescatore from research firm CCS Insight, but said functionality of non-smartphones using Blaast, their data connections and richness of apps could be problematic.

Also software developers have to create another version of their app for Blaast, when they already have to work with dozen major platforms, but Blaast CEO Hjelt said easy-to-use tools and chance to tap a new market have helped 1,100 developers to sign up in Indonesia alone.

XL hopes Blaast -- which is bundled into their unlimited monthly data plan costing around $1.80 -- would boost takeup of data packages, which cover 24 million of XL's 43 million clients.

The 2010-founded Blaast has raised 2.6 million euros from investors including Estonian venture firm Ambient Sound Investment, the investment vehicle of engineers who created Skype, and is in the middle of raising further capital.

(Reporting By Tarmo Virki)