Cellular providers want Nokia to drop Skype from cell phones

Two cell service providers in the UK are supposedly up in arms over Nokia's inclusion of Skype software on its N97 handset, and are threatening not to carry the device unless the software is ditched. This stance is not only annoying to consumers who are beginning to like VoIP, but it could also even hurt the carriers' business in the long run.

By Jacqui Cheng

Two UK mobile operators are reportedly fuming at Nokia for including a mobile version of Skype on its N97 handset. Both Orange and O2 are so terrified that the popular VoIP service will siphon away profitable cell minutes by allowing users to make free calls that they are supposedly threatening not to carry the device unless Skype is removed.

The outrage is going on behind closed doors for the time being, though it's hardly surprising, given the power that carriers have traditionally had over handset manufacturers. They don't like customers having options that the handset maker wants to offer when they believe it might threaten their bottom line—even if they ultimately benefit consumers.

This attitude is merely reinforced by the anonymous comments made to Mobile Today about the issue. "This is another example of them trying to build an ecosystem that is all about Nokia and reduces the operator to a dumb pipe," one mobile operator told the site. "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?"

3 is a mobile operator in the UK that can apparently see the VoIP writing on the wall; it already offers a handset with Skype capabilities, and T-Mobile has also gotten on board with support for the service. Unfortunately O2 and Orange aren't fans of it, and are visibly holding back on allowing VoIP software so they can make sure it won't hurt their business.

This is, of course, a frustrating development for customers who are increasingly buying handsets equipped with WiFi capabilities and want to be able to take full advantage of their capabilities. VoIP use on cell phones helps customers to save money and minutes by making extremely low-cost calls when on a WiFi network, without having to carry a second Skype phone with them.

Including VoIP software on mobile phones could actually lead to more sales, more new customers, and even more cell network use because of the new customers. In fact, a "senior industry source" speaking to Mobile Today suggested exactly that: "If you look at what 3 has done—chargeable calls on Skype phones is bigger than those without it."

This fear of VoIP is certainly not limited to the UK; mobile operators in the US have also been extremely cautious in allowing handsets to be equipped with Skype or other VoIP software, though some are taking baby steps. AT&T sort of tolerates VoIP apps on Apple's iPhone, though they must be restricted to WiFi-only—no VoIP calls over the cell network for you! Additionally, T-Mobile has launched HotSpot@Home here in the US, which allows users to make VoIP calls over WiFi networks that automatically switch to the cell network when users wander outside of WiFi range.

As VoIP becomes more pervasive, customers will put more pressure on cell operators to let them make those calls when they want to. It seems like a better idea for carriers to get on board now—even in a limited sense with WiFi-only VoIP—than to put it off until customers get really irritated.

Original here