Johannesburg — CELLPHONE operator Vodacom said yesterday it would be the first local operator to set up a fully fledged business unit to offer mobile advertising services to reach its 25-million users.

Vodacom CEO Alan Knott-Craig said the mobile advertising industry would be worth R1,5bn, or 4% of the total ad-spend by 2011. He said the company was in a position to make mobile advertising work in the South African market.

Though the company would not say how much money it would dedicate to the success of the business unit, which will be called On-The-Line, Knott-Craig said it would do whatever it took to ensure the model worked, because mobile advertising was " too large a medium to ignore".

Rick Joubert, who heads On-The-Line, said the company would focus on selling advertising on its mobile internet sites Vodafone live! and Vodacom4me, which draw a combined 1,4- million users each month.

Joubert said Vodafone live! already received more hits each month than News24 -- which, according to Nielsen Netresearch, is the country's most visited website.

Joubert said another focus would be selling advertising space on Vodacom's free call-back service, Please Call Me. He said that up to 20-million of these messages were sent each day.

He said consumers would also be targeted by direct marketing campaigns through messages and adverts delivered by SMS or MMS, but would have to choose to receive these ads.

Vodacom commercial executive director Romeo Kumalo said: "We will use free minutes and SMSes to give incentive to people to opt in to receive these messages."