Boost signs up 40,0000 users for location service

NEW YORK, Nov 14 (Reuters) - Sprint Nextel Corp.'s(S.N) teen-focused unit Boost Mobile said on Tuesday it has signed about 40,000 customers in the first seven weeks of its free trial of a friend locator service it plans to launch Nov. 20.

The service ties satellite technology with software from start-up developer Loopt to enable users to find their friends' locations on a phone screen map or disclose their own location to friends who are nearby.

Boost aims to win customer loyalty and revenue through commercial applications of location technology that is legally required to be built into U.S. cell phones to help emergency services find callers more easily.

Boost, a provider of wireless services primarily to 14-to-25-year-olds, plans to offer its service for free until 2007 in the hope of getting customers so addicted they would be willing to start paying $2.99 a month.

"We think a lot will," said Loopt Chief Executive Sam Altman, 21, who dropped out of college to run the company he set up in 2005 with a fellow student.

"This has the potential to replace the phonebook as the default application," for young people's phones he said. Altman added he expected to extend the application to other U.S. services as soon as next year.

The Boost launch follows a similar offer last week from Helio, a venture of SK Telecom (017670.KS) and EarthLink Inc (ELNK.O), which also targets young consumers.

But Loopt's Altman believes his offer has a better chance because customers will be able to locate users of rival wireless network operators as well as Boost users. Helios service allows only the location of those using the same service.

Altman said the service should be safer for teenagers than social networking Web-based services such as Myspace, which raised concerns after a number of adults were charged with using the site to arrange illicit encounters with minors.

Loopt said it has addressed such safety concerns by confining the locator feature to people who already know the user and their cell phone number. Boost would also be able to identify any wrong-doers by their telephone number.

"The whole point of this is its supposed to be deepening real-world friendships," said Mark Jacobstein, a marketing executive for Loopt.

Boost has more than 3.8 million customers.

Loopt has enough funding to last it through 2008 and hopes to turn a profit next year, Jacobstein said. The company attracted $5 million of investments from venture capital firms including Sequoia, which is known for backing high-profile companies such as Google Inc (GOOG.O).