Wireless pornography will grow into a global business generating revenues of more than $1bn by 2008, industry experts have predicted.

The market for adult content on wireless devices is currently being inhibited by fears over how children can be protected from such material, according to Yankee Group.

However, the analyst firm's report, Child Protection Unlocks Wireless Adult Content Market, advises that if operators can develop a solid mechanism for protecting minors - as Vodafone UK has done - they can safely profit from the opportunity.

PhoneErotica.com, controlled by wireless startup PhoneBox Entertainment, receives more than 75 million hits per week, the study noted. Most of the site's users only pay airtime because the service is initially free. Yankee reported that PhoneBox Entertainment decided against billing directly via credit card and instead waits for carriers to enable use of their billing systems.

According to the report, adult content providers pay high tariffs to credit card companies (10 to 15 per cent), but this is not the reason that PhoneBox Entertainment prefers to deal with wireless carriers: the company claims that less than 5 per cent of visitors to wireless adult sites will enter credit card details, compared with over 30 per cent who are willing to put the charge on their phone bill.

Yankee Group found that most customers of wireless adult content, especially in Europe, find services by sending a premium SMS message, rather than browsing to a Wap site.

"In the premium SMS scenario, the carrier arguably distances itself from the content," the study stated. "The carrier can claim that its relationship to the adult content industry is similar to the landline operator's relationship with a sex hotline."