Rdio takes on Pandora and iRadio with free station streaming on iOS and Android

Rdio, the digital music service founded by Skype co-founder Janus Friis, is now letting its mobile users listen to its Pandora-like (S P) personalized radio stations for free. The move comes just weeks after Rdio announced free, ad-supported desktop listening, and two months after Rdio first introduced its personalized stations.

The free service is available on both Android and iOS, but only open to listeners in the US, the UK and Australia.

Free music on mobile devices is not unprecedented. Pandora has been offering free personalized radio stations for years, and Apple’s (S AAPL) recently-launched iTunes Radio service also offers free streaming on iOS devices. The difference is that Rdio will offer its free mobile streaming without any ads, at least for the time being.

The company hopes that the free mobile product will entice enough users to subscribe to its paid offering, which promises full, on-demand access to entire albums, with a total library of 20 million tracks. Pandora and iTunes Radio on the other hand only offer limited interaction, letting users skip a certain number of tracks per hour in order to pay less for music licensing. Rdio’s new free mobile stations follow the same rules, defined 15 years ago in the Digital Millenium Copyright Act, but users can dive in deeper if they chose to pay up.

Interesting about this announcement is that Rdio has apparently beaten arch-rival Spotify to the punch with regards to free mobile streaming. Spotify has reportedly been talking to record labels for some time to give mobile users a taste of what its service is all about, allowing them to listen to a limited number of tracks while on the go. Rdio went down a simpler route, teamed up with the music metadata specialists from the Echo Nest to make its free mobile streams DMCA-compliant, and launched its stations without the need for additional licensing agreements with the labels.

The question is how long the company is willing to subsidize these streams to keep them ad-free. Rdio recently teamed up with radio giant Cumulus, which took a substantial stake in the music startup and now wants to use it to sell more ads. One should expect that Cumulus may want to place those ads on Rdio’s free mobile streams as well.