Mobile internet company iTouch is hoping for a period of rapid expansion next year as it looks to make its $2.3 million purchase of Christchurch mobile application developer Holliday Group pay off.

ITouch New Zealand's general manager, Gavin Thwaites, said the company was still operating its much-hyped wap (wireless application protocol) portal, but no further investment was planned with wap clearly not the hit originally expected.

Instead, the company's focus was on mobile services for businesses tracking the work carried out by sales, service and freight staff.

The company has created two new divisions - Technology Solutions and Business Mobility - born out of Holliday Group, which iTouch bought last December.

The deal also included the issue of an equal value of iTouch shares to Holliday.

Phil Holliday, the managing director of Business Mobility, said the divisions were in expansion mode as they won more business in the corporate market.

"The problem is not generating leads now. It's servicing the proposals out there," he said.

Despite being one of the biggest developers of software based on the popular Palm platform, Mr Holliday said emphasis was now being placed on the rival Pocket PC platform, developed by Microsoft and rapidly gaining the upper hand in the mobile computing market.

"If you want to sell in Europe you have to be in Pocket PC.

"Eighty per cent of the applications are in Pocket PC," he said.

ITouch's New Zealand operations were increasingly contributing software development to the group's other operations in Britain, South Africa, Ireland, Australia and Israel.

The Christchurch development team of around 30 people would be expanded to keep pace with new business won.

Locally, the company targets mainly the business market, selling its iSell, iService and iDeliver mobile services.

Using iSell, TelstraSaturn claims it saves 1700 hours in processing time each month.

Garry Collings, general manager of IT development at Tranz Rail, said the company had bought around 350 "ruggedised" Palm-based personal digital assistants from iTouch for drivers to record freight deliveries. A further 90 were used at Tranz Rail depots.

Technophobes among Tranz Rail's staff were encouraged to play games on the devices to become more familiar with the software.

ITouch, 71 per cent owned by Independent News & Media, parent company of Herald owner Wilson & Horton, also made an Australian acquisition in July, taking a 75 per cent stake in Telequity, which specialises in interactive voice response (IVR) and short message service (SMS) systems.

But extending its business globally from a base in South Africa has been an expensive task for iTouch, which last year lost £14.8 million ($50 million) on sales revenue of £4.2 million.

New Zealand operations contributed turnover of £509,000, but ran at an operating loss of £513,000.