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. Last Updated: 07/27/2016

Japanese Make Bet on Cell Phone Ring Tones

APRussia's market for ring tones is set to grow more than 80 percent.
Sumitomo, the Japanese industrial and financial conglomerate, has bought a blocking stake in SPN Digital, a Russian provider of downloads for mobile phones, the companies said Wednesday.

Sumitomo said it had acquired a more than 25 percent stake, which SPN Digital said it had sold for "less than $10 million." Both companies declined to provide any more details.

So-called mobile content -- the array of downloadable ring tones, games and music available for cell phones -- is a booming market in Russia. Last year, it was worth $300 million and in 2005 is expected to race to $550 million, according J'Son & Partners consultancy. In the first quarter of this year, the market grew by 80 percent from the previous quarter.

SPN Digital, still a relatively small player on the mobile-content market, is expecting to get an injection of know-how and cash in the deal, while Sumitomo said it was interested in the Russian firm's advertising capabilities.

"There are 100 million [cell phone] subscribers in Russia, but the number of mobile content users is very small," said Katsuya Kashiki, a senior manager for new business and investments at Sumitomo.

A multimillion-dollar injection could help SPN Digital move up to become Russia's sixth- or seventh-largest mobile content provider, said Polina Maslennikova, an analyst with J'Son & Partners who tracks the market.

Today, SPN Digital is just beyond the top 10, she said, out of some 180 companies jostling for the attention of mostly young mobile phone users. J'Son & Partners said it expected 70 new firms to join the mobile-content market by year's end.

SPN Digital is part of the SPN Group holding, which also owns SPN Publishing house and the SPN Ogilvy public relations agency.

Pavel Bondzinsky, general director of SPN Digital, said the company planned to use its cooperation with Sumitomo to expand into the markets of Japan, South Korea and Egypt within a year.