Digital music stores have long offered tracks on a song-by-song basis or as albums but while these have experienced strong growth they are not making up for the fall in physical CD sales, indicating that many listeners are choosing to obtain their music for free from illegal download sites. Record labels hope that subscription music services - by locking customers in and offering convenient access to unlimited tracks - will convince people to shun illegal sources and provide them with a recurring income source.

Music retailer Sanity launched a subscription-based digital music store last month and, early next year, Nokia will launch its Comes With Music initiative in Australia, which bundles a one-year unlimited subscription to the Nokia Music Store with certain Nokia phone models. The only way to renew the subscription is to buy a new Nokia Comes With Music phone but, unlike Vodafone's MusicStation, users will be able to keep songs once the subscription ends. Apple, the biggest digital music seller, is in talks with record labels to offer its own unlimited subscription service via iTunes, the Financial Times reported this year.

Vodafone Australia's head of Live! services, Karen Paterson, said the MusicStation subscription store would operate in parallel to Vodafone's existing music store, which allows people to buy songs permanently on a track-by-track basis. "What people might do is discover new tracks through the MusicStation offering and, if they like the song, they might go and buy the physical CD or go into Vodafone Live! and get the full track [forever]," she said.

Paterson said the unlimited track offering allowed customers to discover a far wider range of music as they did not have to worry about paying a fee for each individual song. MusicStation is powered by Omnifone, which provides the service to mobile carriers around the world including Germany, Greece, Hong Kong, Britain, New Zealand Spain and Singapore. "The phone is the one thing apart from your wallet and your keys that you look for when you walk out the door, and what we're starting to see is consumers are coming to expect that their mobile phone can do these sorts of things," Omnifone's managing director for APAC, David Loiterton, said.

"We're not trying to knock off iTunes; we're complementing iTunes." The subscription store gives Vodafone a distinct advantage over its competitors. Telstra Next G customers can buy individual songs from BigPond Music directly via their mobiles, while Optus offers a mediocre music store powered by MTV that provides access to just 6000 songs from the mobile.

Last month, Sanity unveiled Australia's first music subscription store, LoadIt, offering users the ability to download 300 tracks a month - from a total catalogue of 1 million songs - for a $29 monthly fee. However the store, which was the centrepiece of the Australian launch of Windows Vista, has been widely criticised for being a year and a half late and bundled with Windows Media digital rights management (DRM) locks. The use of Windows Media DRM means songs purchased from the store cannot be played on iPods.

Nokia's Music Store, which will compete with Vodafone MusicStation, was unveiled in April but is also bundled with Windows Media DRM. Vodafone said the MusicStation application was available exclusively to Vodafone customers and could be downloaded free from Vodafone Live!

Customers can get a one-week trial free from Vodafone but so far the service is compatible with only nine handsets: LG KU990 Viewty, Nokia 6121 classic, Nokia E65, Nokia N73, Nokia N95 8GB, Sony Ericsson C902, Sony Ericsson W880i, Sony Ericsson W890i and the Nokia 6210 Navigator. Tracks are stored on the phone's memory but cannot be accessed once the subscription ends. If a customer changes his or her handset the music, playlists and preferences are automatically restored.