Telecom operators twice shy as viruses go mobile

It is December 2007 and you have just switched on your new mobile phone to find it has been sending thousands of unwanted photos to all your friends and colleagues, putting you in line for a 5,000 euro bill.

Sounds unlikely? Mobile phone providers want to keep it that way.

They are starting to fit security software to subscribers' cellphones, even though the threat from viruses and other rogue programs is still distant, hoping the mobile market will fend off the scourge of the Internet world.

"We wanted to be proactive...It is still a clean field and we want to keep it that way," said Pasi Mehtonen, head of mobile services at Sonera.

Sonera, a Finnish unit of top Nordic operator TeliaSonera, and its rivals in the homeland of cellphone giant Nokia have been among the first telecoms firms in the world to opt for security software.

Mobile security is on the agenda for most of operators around the world, even though customers are not asking for it.

"On the corporate side, the demand is already there. IT managers have understood the issue. But to the consumers it's still more like pushing it," said Tuukka Toivonen, head of corporate accounts at rival Finnish operator Elisa.

"In smartphones, data security issues are similar to those we have in PCs today," he said, adding security software will become "a must-have" for phones within the next five years.

F-Secure of Finland, the global market leader in mobile security, has won five of eight deals announced with operators, and expects to generate profits from mobile business between 2006 and 2008, when it sees it becoming mainstream.

In addition to Elisa and Sonera, it has deals with Swisscom

and Deutsche Telekom's mobile unit T-Mobile in Germany. Orange, a unit of France Telcom, is piloting its service in Switzerland.

U.S. security software maker McAfee Inc. said last month it expected mobile-device security products to add fractionally to earnings next year and contribute more in 2007.

"Some operators have elected to pick up mobile anti-virus software and break new ground. The vast majority, however, are content to move a lot more cautiously," said Aaron Davidson, chief executive of New Zealand-based antivirus firm Simworks.

"Despite popular belief, most operators move slowly and in my view, the very fact that they are interested in evaluating solutions is a big step forward," he said.

STILL SMALL MARKET

Research firm IDC believes the market for mobile security software will grow around 70 percent annually to ready nearly $1 billion in 2008 from $70 million in 2003, as more people start to use e-mail and the Internet on their phones.

The market for fighting viruses, worms and other malicious software on computers will still be as much as 10 times bigger, according to Research and Markets. But sales of cellphones are four times greater than the 200 million PCs sold annually.

Roughly 50 million advanced "smartphones" are in use, providing mobile access to the Internet and e-mail.

They make up only about 2-3 percent of all mobile phones in the world, but are the fastest growing part of the market, according to research firm Gartner, with annual sales expected to reach 200 million units in 2008.

Three out of four smartphones run on the Symbian operating system, making it the virus-writers' target of choice, with 81 out of the 83 mobile viruses so far recorded, according to F-Secure.

Now mobile viruses can kill a phone or create bills of hundreds of euros by sending pricey picture messages.

And while the mobile industry and security software firms say the risk of catching one is small, it is growing, and there are already thousands of infected phones.

Gartner said recently it does not expect a serious mobile virus outbreak before the end of 2007, adding that mobile operators have a key role in ensuring their networks protect customers.

Most of the mobile viruses and other malicious cellphone software use Bluetooth short-distance radio signals to spread. That requires phones to be near each other, compared with computer viruses which mostly spread through e-mail or over the Internet.

"Not one of these is able to spread by itself, always the user of the phone has to accept installing of the virus," said Mikko Hypponen, head of research at F-Secure.