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Microsoft, Sun charge into mobile billing

Microsoft offers Portal Software's billing application to wireless carriers. Sun buys billing-software maker Pixo. Both aim to help cell phone companies charge for downloads.

Microsoft and Sun Microsystems have strengthened their lineup of products that allow cell phone companies to bill for downloads such as games or ring tones.

The moves signal a new battle brewing between the two software heavyweights to win a dwindling share of spending by cell phone service providers.

Providers are turning to downloads as a new revenue source. But most have billing systems that are a jumble of sometimes decades-old software, the result of mergers of different phone companies that created modern giants such as Verizon Communications and Verizon Wireless.

"There's a lot of hokey Band-Aid type of things so carriers can charge for voice systems, let alone the downloads they want to do," said Michael Doherty, a telecom analyst at market research firm Ovum.

Sun and Microsoft aim to give wireless carriers a way to streamline and centralize billing for the services they sell.

"These services are really basic, but the problem exists because providers don't have the ability to bill for them," said Clinton Dickey, a Microsoft global partner manager.

He said Microsoft has begun working with Portal Software to make Portal's billing software available to any service provider that uses Microsoft's .Net platform, not just cell phone companies. But cell phone companies will be the first targeted for the goods when they arrive on the market later this year, Dickey said.

Microsoft will be making history, he said, because the software will use Web services to bill customers. Web services allow software applications to communicate over the Web. Dickey said it would be cheaper for companies to use the services than install huge amounts of new billing software and hardware.

On Thursday, Sun said it would buy Pixo, a 6-year-old billing software maker. The all-cash deal between Pixo and Sun is expected to close sometime after July 1.

Sun will incorporate Pixo's software into its own lineup of telephone network products.

Sun Executive Vice President Jonathan Schwartz said in a statement that Pixo's software will be a "critical link" to tie together various Sun software, such as its popular J2ME, which more than two dozens carriers now use.

Sun gains an advantage because of Pixo's specialty in digital rights management, he added, which is becoming a new concern as operators sell ring tones based on popular songs.