Moments later, an SMS arrives offering a discount for a cafe in the very mall he has just entered.

Spooky coincidence?

No. In fact, the telco is testing a new location-based advertising service that sends out marketing messages whenever a customer is near a participating shop.

The soon-to-be-launched service is one of a suite of new products that the telecoms giant is launching to grab the lead in Singapore's fledgling mobile and Internet ad space.

SingTel has just started a one-month trial involving 20,000 users and may introduce the services commercially as early as next March.

The telco is seeking new growth avenues, as traditional phone and data services become increasingly commoditised.

Already, No.3 telco M1 is teaming up with media group Singapore Press Holdings to launch a similar location- based service next month that will cover 70 malls.

SingTel says its new services will let companies target their advertising more precisely and get better feedback on their ad campaigns.

'We hope to become a leading media owner in this field and garner a significant share of this revenue pie over the next five years,' said consumer executive vice-president Quek Peck Leng.

Ms Vicki Brady, who led the project before transferring back to SingTel's Australian unit Optus this week, noted that Internet ads now make up less than 5 per cent of total ad spending in Singapore, far below the 10 per cent in countries such as Australia and the United States.

SingTel estimates that annual local mobile and Internet ad spending could hit more than $200 million by 2012. But even that industry projection is small when compared to the billion-dollar revenues the telco rakes in from its Singapore business alone.

SingTel has partnered media planning agency MindShare to help it recruit advertisers such as the Crystal Jade restaurant group for the trial.

But the telco is open to working with other partners for the commercial launch, said Ms Brady.

The location-based service is being tested at the Shaw House and Heeren malls and works by tracking customers via the base station to which their phones are connected.