Ad-funded telco reaches 100,000 clients in Britain

HELSINKI (Reuters) - Blyk, a mobile phone service that offers a number of free calls and text messages in return for users accepting advertisements, said on Thursday it had reached 100,000 clients in Britain after six months.

Ad companies and operators are eyeing mobile advertising as an opportunity to generate new revenue streams and they are likely to welcome the news that Blyk reached its 100,000 target six months ahead of schedule.

Blyk said the ad campaigns had generated average response rates of 29 percent, compared with the usual response rates in advertising of just a few percentage points.

The virtual operator is targeting 16 to 24 year olds, renting airtime from Orange (FTE.PA: Quote, Profile, Research, Stock Buzz) and using technology from Nokia Siemens Networks NSN.UL.

"Reaching 100,000 members is significant for advertisers because it gives them the opportunity to engage with a mass youth audience," Shaun Gregory, the head of Blyk's British business, said in a statement.

Blyk, co-founded by Pekka Ala-Pietila, former president of the world's top cellphone maker, Nokia (NOK1V.HE: Quote, Profile, Research, Stock Buzz), plans to open the service in several European countries. It has a Netherlands launch scheduled for later this year.

According to a number of studies the mobile advertising market is expected to generate revenues ranging somewhere between $1 billion and $24 billion within four years.

Advertisers are attracted to the sheer scale of the potential audience -- 3 billion people worldwide use mobile phones.

(Reporting by Tarmo Virki; Editing by Quentin Bryar)