Nokia N97 Vetoed By O2 & Orange Over Skype Integration

Where the Finns took a stand, so now too do the telcos...

At the back end of the Mobile World Congress in mid-February it was announced that Nokia would be integrating 3G Skype access into the N97. Despite more flashy unveilings I suggested it could “have the biggest long term repercussions of anything announced this week” and here’s why…

Both O2 and Orange have blocked the sale of the Finnish company’s latest (and arguably greatest) flagship handset on their networks over the inclusion of the VoIP software.

Speaking to Mobile Today, an operator which asked to remain anonymous 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.”

O2 was marginally less cold: “We are currently working with Nokia to understand their Skype service and the business model around it,” it explained.

The problem for mobile networks however is that their future ”’is that of a dumb pipe”’. There is no getting around it. The software is on the phone, the value is on the phone and networks are simply there to provide airtime and data. In fact soon enough, the non-geographic nature of VoIP will see even airtime rendered obsolete and networks will be little more than mobile ISPs – especially with the arrival of LTE. There’s no margin in this for them but then again the Post Office wasn’t too happy with the invention of email. It’s called progress and they’re going to have to suck it up.

To use another analogy: imagine being told by your broadband provider that it has the right to choose what software you can install on your PC and carries the ability to block it. That would simply be unheard of these days for any legal programme or service and VoIP certainly isn’t illegal. Furthermore, as the smartphone is becoming ever more the mobile computer this is an inevitable and ongoing clash.

I understand your stress mobile networks, you’ve made billions under the existing infrastructure and will make far less under a new one but the game is changing now and there’s nothing you can do about it. Besides, I’m sure 3 – and it’s happy acceptance of Skype over its network via the progressive Skypephone series – will be happy to take all your business from you…

”’Update:”’ Skype has been in touch with us and understandably it can’t say too much, but certainly its heart is in the right place:

“Skype does not comment on rumours, however, our beliefs are clear. Skype believes that consumers should be entitled to an open Internet whenever and wherever they want to have a conversation.”

Spot on fellas.

via Mobile Today