While operators get all coy on the subject of adult content on mobiles, experts agree that, as technology advances, it will provide a major boost to cash flow, writes Fiona Harvey.

If there's one sure-fire way of swelling your revenue, she's busty and scantily clad. Sex sells, as any marketer knows. Although they may be loath to proclaim so in public, mobile phone operators, desperate for new revenue streams, must regard sex as a sure way to boost cash flow.

"Any new medium, from the printing press to the internet, is fuelled by adult content. Cinema in the 1920s, video recorders in the 1970s, DVDs in the 1990s - it's the same pattern," says Lars Becker, chief executive of Flytxt, the mobile marketing company.

"Whenever there's a new platform for distribution, you tend to see 75 per cent of the content being adult-related," adds Charles Prast, chief executive of Private Media Group (PMG), one of the world's biggest pornography groups.

The argument for mobile porn is simple. On the internet, pornography has been one of the few success stories.

Datamonitor calculates that back in 1998, adult content was worth $1 billion (€0.93 billion), making it a bigger money-spinner than all the other forms of online content put together. Revenue carried on growing at an estimated 25 per cent a year.

Why shouldn't the same be true of mobile phones? Though handsets have not been up to much so far, offering only a few lines of text and no pictures, advances like multimedia messaging and better handsets open up a greater spread of possible content. "They're also personal and discreet - the perfect platform," says Mr Prast.

Even with today's technical limitations, sex will find a way: naughty text messages, sent by allegedly bored housewives but billed to the recipient, already have several hundred thousand users per month in the UK.

So with bigger, colour screens, plus sound, and in the near future even video clips, all privately downloadable to the palm of your hand, surely the mobile belongs to porn? At a recent round table of mobile pundits, all thought so.

Mike Worley of Victoria Real, which specialises in streaming and wireless technology, voiced a typical prophecy: "[The winners\] will probably be the old stalwarts of gambling, sport and adult - the things people are passionate about."

Paul Myers, managing director of Wippit, a music distribution specialist, agreed. "The one thing that we know people will pay over the odds for, because it is not something they think about with their heads, is pornography or flirting services."

Gartner Group, the industry research company, estimates that adult content over mobile phones was worth $87 million in 2002 and will generate $1.3 billion in revenues in western Europe in 2005, or about 5 per cent of the total mobile data market.

But mobile operators themselves come over strangely coy when the subject is broached. Most deny that adult content will be a major revenue source.

Ms Geraldine Wilson, managing director of Vodafone UK content services, says: "In other European markets where they are more receptive to adult content than the UK, it is already an area of interest to customers, after news and sport. But we always like to operate within the culture of each market."

No one, it seems, wants to come right out and say that erotica could be a strong driver for growth.

While observers happily assert that "girls, games and gambling" are the triple drivers for Hutchison's 3G network, 3 itself pours on cold water.

"No, this is not part of our plan," says Matt Peacock, 3's director of external relations, firmly. "Our research says this is not what people want. What they want is football."

In fact, 3's customer research shows gambling to be the form of adult service that turns most people on.

In the Republic O2 says it does not offer adult-oriented content, and has not yet made a decision about the future.

Vodafone Ireland also says it has no plans at present to introduce pornographic services as part of its 3G content portfolio.

Interestingly, neither of the two big Irish operators have completely ruled it out.

It's not even just the operators who disagree that pornography has a future on the phone. Spooky Suicide runs the Suicide Girls soft-porn website. He says: "I don't see that people will want to look at pictures while they are on the move. They can look at them at home, on their PCs, or on their hotel room TV if they're travelling."

But if porn is truly not what people want, why have current adult mobile offerings proved so popular, severe limitations notwithstanding? PMG launched its reverse billing text chat barely two months ago, and already it generates an estimated £40,000 a month. Much-despised WAP technology gained 400 users in two weeks in a newly launched service with Daily Sport content, without marketing. Its adult reverse-billed SMS chat service boasts 202,000 UK users, in less than a year of operation.

What's more, mobile porn offers an important advantage over internet pornography, adds Mr Prast: billing. "On the internet, people are fed up of getting ripped off by fraudster sites. They don't like giving out their credit card number. But by mobile phone, you just pay for the service with your phone bill, so it's easy, safe and discreet."

Part of the reason for the operators' coyness comes from the complex regulatory issues surrounding adult content. George Kidd, director of Icstis, which regulates premium-rate mobile services in the UK, warns: "There will be content that is illegal, so mobile operators have to figure out what to do about that."

Mobile operators are anxious to insist on their patrolling of the content at all opportunities, and every statement they make about adult content is laced with references to filtering and customer protection.

An O2 spokesman makes a typical rider to the company's "exploration" of adult deals: "We will not launch these services unless filtering software is in place to protect customers."

Vodafone's Ms Wilson echoes: "We are working on access controls, and we'll have that by the end of this year. We certainly wouldn't do it without access controls." What, too, of the legal problems on the other side: that of copyright protection for the content owners? When a user receives a picture or text message, it is at present very difficult to prevent him simply passing it on to any other mobile number.

Users could also begin to generate their own "amateur" pornography themselves, perhaps with the digital cameras now built into many handsets, and distribute it in a similarly peer-to-peer fashion.

Wippit's Mr Myers believes that peer-to-peer content distribution by mobile phone will catch on in both the music and the adult content markets.If he's right, mobile users could soon be swapping music files and both professional and amateur pornography among themselves.

But while the prospect of such services may give record companies headaches, Mr Prast remains nonchalant: "I don't believe people will want to swap adult content with one another. It's too private. After the age of about 18, you don't really necessarily want your friends to know you're looking at this kind of content." That could also be a reason why customer research suggests porn is low on people's priorities.

Also, adult content has a surprisingly short shelf-life. Mr Prast notes: "If you look at the internet sites that are most successful, they are the ones that refresh their content weekly or bi-weekly. People want the new stuff."

He warns, though, that pricing will be key: "This market is also about not over-charging customers. People are willing to pay, but they don't like to be ripped off." While operators dither, companies like Playboy Enterprises, PMG and smaller owners of adult content are champing at the bit.

Public transport users are already well aware which of their fellow travellers are most likely to be found fiddling with their phones: young men. These days, they're probably just playing the primitive and inane games that are the best conventional handsets can offer. As new handsets with better screens and graphics become mainstream, if the porn industry is right, they may be fiddling for a different reason.

- (Financial Times Service)