Getting students to read books in English is a great way for them to improve their vocabulary, develop key reading skills and also motivate them to learn more English - after all, real books on subjects that interest them are far more engaging than a dull article in the coursebook. And it's possible for them to do this on their mobile phones. For example, this is the book I'm currently reading on my Nokia smartphone.
Most phones have some kind of reading application available, the most popular being the Mobipocket Reader, available free from their website. You can also buy books from their site, including both dictionaries and esl reference books. But these do need to be paid for.
However, there is also a vast library of free books available to your students, most notably 30000 out of copyright classics downloadable from the fantastic Project Gutenberg site. This is a great source of classic texts and lesser-known novels from the past and a great way for your students to read English books for free.