Alltel to offer podcasts on cellphones

Alltel Corp. the No. 5 U.S. cellphone provider, said on Tuesday it will provide a service to download audio clips from the Internet to cellphones in a bid to expand its business beyond voice services.

Like its bigger rivals, Alltel plans to boost revenue with new services as phone call prices decline. Alltel, the leading U.S. rural wireless provider, said it will charge $3.99 a month to let subscribers download or stream Web-based clips, also known as podcasts, to their cellphones.

Privately held Melodeo of Seattle is providing Alltel with the technology to offer the clips, which could include everything from sports, entertainment or news clips from media companies to clips from independent podcast creators.

The popularity of portable digital music players such Apple Computer Inc.'s (Nasdaq:AAPL - news) iPod helped spur the creation of podcasts by media companies and individuals. These clips are often free on the Internet, but Melodeo hopes users will pay for the convenience of having the clips on their cellphones.

Listening to podcasts via desktop computers or iPods has become popular, particularly among young people, but it is not clear how quickly the trend will spread to cellphones, according to Jupiter Research analyst Julie Ask.

"There's no doubt that there's interest in podcasts," she said. "The only open question is to what extent I'm going to do this on the fly or plan and take it with me."

About 20 percent of 18 to 24 year-olds have listened to or downloaded a podcast, according to Ask.

(c) Reuters NEW YORK