* Mozilla, Telefonica, Qualcomm working on technology
* New platform focuses on lowering smartphone price
* Price seen well below cheapest Android phones
* Cuts out need for separate operating system in phones
* First phones to reach consumers this year
By Tarmo Virki, European Technology Correspondent
BARCELONA, Feb 27 (Reuters) - An industry alliance including the top wireless chipset provider Qualcomm will step up competition in the smartphone software market on Monday, with a new Internet-based free technology for cheaper smartphones.
Telecom operator Telefonica, Qualcomm and Mozilla Foundation, creator of Firefox Internet brower, who have worked on creating the platform since last year, will show devices running it at the Mobile World Congress trade show in Barcelona.
The new platform combines HTML5, the preferred standard for creating mobile browser content, with some of the core elements of Linux technology, cutting the need for a separate operating system and enabling fast roll-out of smartphones.
"If you are doing Android phones now, you can bring up a machine in days," Jay Sullivan, vice president of products at Mozilla, told Reuters.
Cutting some layers of traditional operating systems allows the new platform to be used on smartphones with lower processing power and a smaller cost of materials.
Carlos Domingo, director of Product Development & Innovation at Telefonica's Digital unit, said this enables significantly cheaper prices than the low-end Android models when they come to market later this year.
"This is the way to bring smartphones to masses on emerging markets," Domingo said.
The smartphone market is dominated by Google's Android and Apple, with a number of smaller players like RIM, Microsoft and Samsung's Bada also competing for a share of the market.
The sector has seen the demise of many platforms over the last few years, including operator-led initiatives like LiMo, but also Palm's WebOS and Nokia's Symbian operating system which failed to win enough support from developers and device manufacturers.
"There remains the same questions of scale and broader industry support, but Telefonica has sensibly identified an HTML5 savvy ally in Mozilla," said analyst Geoff Blaber from wireless consultancy CCS Insight.
The new free platform is putting pressure on Microsoft and Google who are trying to attract handset manufacturers, but Microsoft collects licencing fees of up to $20 per phone and collects royalties from makers of Android devices.
Operators have tried to create platforms to battle against rising dominance of Android, but have so far failed as they had to create from scratch the ecosystem around platform: developer tools, applications, developer community.
The new platform taps into the large community of web developers and most of the apps are already created on HTML5.
"One of the main problems of the new ecosystem is a cold-start-problem. Now we start with all the ecosystem already in place," said Telefonica's Domingo.
Adobe and the largest independent app store GetJar said they would support the new platform.
"We are seeing HTML5 becoming really popular among developers," said Ilja Laurs, GetJar's founder and CEO.