At least two mobile phone providers in the United Kingdom have expressed their unhappiness over Nokia's decision to bundle Skype into its latest N97 smartphone. In a tussle that is going on behind closed doors--so far--Orange and O2 have reportedly thrown down the gauntlet and threatened not to carry the N97 unless Nokia meets their demand to remove Skype from the phones.

At stake is a feeling that handset makers are out to reduce operators to nothing more than a "dumb pipe." In an anonymous comment made by one mobile operator, "This is another example of them trying to build an ecosystem that is all about Nokia and reduces the operator to a dumb pipe...if you spend upwards of £40m per year building your brand, you don't want to be just a dumb pipe do you?"

The crux of the matter might be more complex than it initially seems. At stake is the potential that the prevalence of VoIP either via 3G data or WLAN will hurt the business of mobile operators. When it comes to data, one way to compete is in terms of network access speeds or the amount of bundled data that can be transferred in a month. In an environment where VoIP applications like Skype are easily accessible, operators stand to lose precious voice revenue as data caps are increased.

To read more on the article:
- check out this article from Ars Technica

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