MySpace Cell Phones Hit North American Market

NEW YORK – U.S. mobile phones are pretty staid affairs compared to what's available in Asia and Europe, but a phone service launching Tuesday aims to bring cutting-edge features from South Korea to a U.S. audience.

Helio Inc. is a joint venture of Internet service provider EarthLink Inc.(ELNK) and Korea's SK Telecom. It will start selling two phones Tuesday that it's positioning primarily as blogging tools for a mobile generation and only secondarily as phones.

"We start out with data, and voice is just another application," said Sky Dayton, founder of EarthLink and chief executive of Helio.

The Helio phone will be tightly connected to MySpace, the social-networking site that has become hugely popular among teenagers and twenty-somethings.

Users will be able to take photos with the phones and post them directly to their MySpace pages, read and write MySpace mail and participate in discussions.

This won't come cheap: Helio's two models, "Hero" and "Kickflip," will cost $275 and $250, respectively.

The phones, based on Korean designs and made by Asian manufacturers, have large color screens, removable memory and cameras with flashes.

The cheapest plan that includes unlimited data costs $85 a month, and includes 1,000 voice minutes (evenings and weekends are free.) The average U.S. cell-phone bill is around $50.

"We're not looking to be the bargain-basement provider," Dayton said.

After laying out the money for a phone and a plan, buyers may be tempted to use an unusual feature of the service: begging by cell phone.

Users can ask other users to buy them games, music or videos that they can download to the phone. Games cost $5.99, while music videos cost $2.49.

The phones will be available online Tuesday, and in 1,000 stores by the end of the month, Dayton said. Some of the partners are music and entertainment chains such as Tower Records and FYE, but the phones will also be sold in 100 college bookstores by the end of the year.

Helio doesn't have its own cellular network. Instead, it buys wholesale access to Sprint Nextel Corp.'s (S) and Verizon Wireless' high-speed networks, making it a so-called "mobile virtual network operator."

Other MVNOs include Virgin Mobile and ESPN Mobile. The Walt Disney Co. (DIS) is launching its own family-oriented MVNO in June.

[Verizon Wireless is a joint venture of Verizon (VZ) and Vodafone (VOD). EPSN is a joint venture of ABC, part of Disney, and the privately held Hearst Corporation. Virgin Mobile is traded on the London Stock Exchange. MySpace.com is owned and operated by News Corporation (NWS).]

FOXNews.com is owned and operated by News Corporation, which also owns MySpace.com.