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O2 & Orange angry at Nokia N97/Skype tie-up

VoIP software could lose operators revenue

Mobile operators O2 and Orange may refuse to offer Nokia's N97 handset unless the phone manufacturer removes the preinstalled Skype software.

Nokia announced last month that it will install the VoIP software onto handsets and integrate it into the phone's address book, giving users the option to contact friends and colleagues either on their regular phone number or by using their Skype username.

If this option is used, the telephone call or text message will be routed over the internet and not through the network provider, which would result is lost revenue for mobile operators. It is thought O2 and Orange have expressed their concern about this to Nokia executives.

O2 and Orange may not stock Nokia's new N97 handset

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According to Mobile Today, an unnamed source at one of the operators said: "This is another example of them trying to build an ecosystem that is all about Nokia and reduces the operator to a dumb pipe".

"Some people like 3 may be in a position where it could make sense to accept that. But if you spend upwards of £40m per year building your brand, you don't want to be just a dumb pipe do you? Nokia have tried several ways to own the customer over the years and operators have had to say no."

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O2 told Mobile Today: "We are currently working with Nokia to understand their Skype service and the business model around it. We continually evaluate new applications and mobile services for our customer base".

Mobile operator Three doesn't seem to be bothered by handset manufacturers installing Skype on their phones. It already offers two handsets with VoIP software under the 3 Skypephone brand. A third, the INQ1, is also sold through Three but its developer Inq Mobile hopes to find other operators interested in selling it this year.

See also: EU seeks to change Skype wiretapping laws


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