By Emma Clark BBC News Online business reporter

Lars Becker helped found Flytxt, a company that runs marketing campaigns through text messages. He talks to BBC News Online about the power of SMS. Lars Becker has got his eye on a new mobile phone.

We're talking dual-band, polyphonic ring tones and a flip-open colour screen.

Becker's dream phone

"It's really, really cool," says Mr Becker, his eyes shining. "Once you've heard the polyphonic ringing tones, there's no going back."

The object of his desire is a Samsung T100, apparently a step-up from his current Siemens model, which includes an MP3 player.

Mr Becker, who helped found a text-messaging company at 26 years old, is quite clearly a technophile.

Pioneering

The inspiration for Flytxt came while he was covering the Finnish telecom market for the private equity arm of US investment bank Morgan Stanley.

Text terms

SMS (short messaging service): standard form of text messaging via mobile phones MMS (multi-media messaging service): Text messages with colour pictures and accompanying melodies via new-generation mobile phones with colour screens EMS (enhanced messaging service): Text messaging with basic graphics and melodies, available, for example, on Nokia phones

The explosion of text messaging in Scandinavia persuaded him to set up a company designing text-based marketing campaigns via mobile phones.

Flytxt's clients include the chocolate company Cadbury, magazine publisher Emap, Channel 4, BBC Interactive (BBCi) and 20th Century Fox.

"It was unclear which industries would adopt SMS marketing but we guessed it would be media and events," says Mr Becker, who was later made chief executive of Flytxt.

Film distributors have used Flytxt's SMS campaigns to promote films, such as Lord of the Rings, Harry Potter and Ocean's Eleven.

Becker: Flytxt survived on its own steam

Others, such as Emap's Smash Hits and Sneak magazines, employ Flytxt to run text-messaging clubs.

Just this month, BBCi launched a text alert service, run by Flytxt, as part of its World Cup coverage and in aid of Sport Relief.

The service, which costs 20p per message, is the first text-based premium rate service to be advertised on prime-time TV.

The future's SMS

The potential for SMS is huge as companies begin to devote a much larger share of their marketing budgets to text campaigns.

In a survey last year of European direct marketers, Forrester Research found that 56% of respondents plan to regularly use SMS marketing by 2003.

Response rates by customers to SMS campaigns are high as 11%, compared to 2-3% for direct mail.

"It's a marketer's dream to get that response rate," says Michelle de Lussanet, an analyst at Forrester.

Operation txt

From its humble beginnings as a signalling channel for mobile phone engineers, SMS has stunned the industry with its rapid take-up.

Its success in Europe as a medium for communication was assured after users were able to text across different mobile phone networks.

In the US, where text messaging has failed to take off, users can only send messages within their own network.

The viral nature of SMS saw it pick up virgin users almost instantly after they had received a message for the first time.

Now 50% of European mobile phone users are active text messagers, says Ms De Lussanet.

Airborne

Flytxt turned its first profit after 18 months in the last quarter of 2001. It expects its first profitable financial year to come in June 2003.

Mr Becker launched the company in April 2000 with the help of three friends, Pamir Gelenbe, Carsten Boers and Thomas Schuster.

SMS lifted sales for Cadbury

The timing wasn't perfect but it forced to Flytxt to "survive on its own steam" with only two million euros ($1.84m; �1.26m) of venture capital.

"If we had had access to more funding, we might not have made a profit so quickly," he says. "It was a good discipline for us."

Flytxt found its wings when it designed a marketing campaign for Cadbury last year.

Messages on 65 million chocolate bar wrappers invited customers to enter a competition by sending a text message.

Cadbury believes the campaign gave its sales "a big lift" - and Mr Becker still carries a squashed Boost bar in his bag as a souvenir.

Toughing it out

However, despite Flytxt's early success, the conditions in an untried marketplace remain tough.

It's a living organism, a going concern - the whole experience has been extremely satisfying

Lars Becker

Finland's Riot Entertainment, which ran a text-message club for Bridget Jones fans, went bust in March after burning through its cash.

In Forrester's survey, Flytxt scored highly in helping clients develop campaigns and for its technical expertise.

However, Ms De Lussanet predicts that in a couple of years advertising agencies will increasingly take over the creative brief, leaving mobile marketers such as Flytxt to focus on technology.

It is also likely that agencies will look to snap up the likes of Flytxt to bolster their offering.

Clearly, Flytxt has already been approached - Mr Becker raises his eyebrows twice and looks quizzical when asked the question, but names no names.

Flying solo

For the present, the company is determined to remain independent.

The Flytxt team photo

"It is still a young industry and the business models are still changing. We would not fit into a big organisation with strict reporting lines," he says tactfully.

Evidently, he is still much in love with his baby, which evolved into a 25-person company from one computer in a bedroom.

"It's a living organism, a going concern. The whole experience has been extremely satisfying," he says, waving his hands around for added emphasis.

One day soon, Mr Becker will buy his dream phone. With a bit of luck, he will make the right call with his business too.