Mobile phone operators and the music industry have done a rocking business in ring tones that deliver popular but crude versions of hit songs to subscribers. The next act is fully fledged music downloads, enabled by 3G mobile technology. With the growing popularity of devices such as Apple's iPod, it takes little to imagine new revenue streams as consumers grow accustomed to using their handsets as MP3 players. 'It's an absolute natural for wireless technology. We have a whole generation of people coming up who are familiar with portable entertainment,' Sunday Communications group managing director Bruce Hicks said. Already, subscribers to Hutchison Telecom's 3G services can download songs and music videos for playback on their handsets, but the choices are limited. This is expected to change as the mobile music industry matures. '[3G] is the technology which makes the business possible,' said Sudhanshu Sarronwala, chief executive of Soundbuzz, which has a 150,000-song music library and is a format management partner of Hutchison. 'A lot of the Chinese repertoire of the record labels has not been digitalised. [Of our 150,000 songs] there are only 20,000 Chinese songs. 'We see the demand growing very dramatically.' Soundbuzz runs a service that allows customers to browse and sample its music library over the internet, using GPRS-enabled mobile phones to pay. While mobile music catalogues are growing, operators could compete fiercely to sign exclusive deals with popular artists. Hong Kong mobile phone users, for instance, know where to find Jay Chou - at CSL, the company he represents. Nevertheless, some industry players do not see mobile carriers competing vigorously to sign exclusive deals with artists. 'You don't have the ability to corner the market because there's so much out there,' Mr Hicks said. The opportunities are not limited to music downloads. Ruuben van den Heuvel, vice-president of business development at Sony BMG, said the company's most popular service was ring-back tones, or the tunes the calling party hears while waiting for the recipient to answer. Universal Music hopes to take the music-mobile connection one step further, holding the first concert this month that encourages audience members to leave their mobile-phones switched on. 'There will be games and a pre-concert party in which we'll ask the audience to send SMS messages to the stage,' said Catherine Leung, Asia-Pacific general manager at Universal Mobile. 'Mobile technology is not limited to downloads; it is also an effective means to promote our company and artists.' Mr Van den Heuvel said the development of the mobile music industry was often hindered by operators' lack of creativity and experience. 'They are not music people,' he said. 'We have to educate them that it is a hit-driven industry and we are to provide user experience.' Ms Leung said it was better to take control of the entire creative process to ensure a quality listening experience. 'Our strategy is to take care of everything - from providing content to formatting, royalty and packaging - instead of subcontracting to a content provider,' she said. Another problem is piracy, especially as data transfer rates pick up. SmarTone Telecommunications chief executive Douglas Li sees music downloads as a significant revenue source, especially as mobile phones take on the functions of MP3 players. But consumers would need to break the piracy habit before a business could be developed, he said. 'How do you persuade a guy to pay for it instead of ripping it off the internet?' he said.