Networks gang up on Nokia

As if Nokia CEO Jorma Ollila didn't have enough to worry about already, European networks are teaming up to design mobile phones. It's a challenge not just to Nokia, but to the current consensus-driven standards process.

Orange, mmO2, Telefonica, T-Mobile and Vodafone are talking about agreeing reference specifications to guarantee what a Vodafone spokesman called a "higher level of commonality in handset terminal platforms."This is intended to give the operators more power over specifying technical implementations - like DoCoMo - rather than negotiating power over pricing. The carriers have for some time wanted to put a dent in Nokia's powerful brand, so customers identify more closely with the network, which they hope increases loyalty in the long run. The success of Vodafone's Live! service in Europe - which finally made a success of WAP - has given the operators more confidence. Vodafone pointedly chose a relatively small handset manufacturer, Sharp, in preference to a Tier One vendor.

Nokia has been instrumental in driving handset, infrastructure and service standards and remains the major force behind standards initiatives such as 3GPP and OMA - the Open Mobile Alliance that's anything but Open. While Nokia's endorsement doesn't guarantee a standard will succeed, rejection by Nokia will mean one will almost certainly die, as we saw with EMS messaging.

The seven carriers involved in the talks say that it's simply about technical requirements, and it's not an OS ploy. But will punters one day opt for a T-Mobile phone or an O2 phone over a Nokia or Sony Ericsson model? For the carriers, it's a risky strategy. In the consumer market , subscribers can switch between networks with relative ease, and that's not a freedom they're going to surrender voluntarily. And as long as phones remain a fashion item the Tier One vendors will have an advantage from deploying their design expertise.

However, the carriers look with envy at the vertical monopoly enjoyed by NTT DoCoMo, which has a tight grip on everything from technical specifications to billing. ®

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