February 16, 2011 / 2:54 PM / 9 years ago

Orange warns Nokia-Microsoft against closed system

BARCELONA (Reuters) - Telecom operators may be discouraged from offering phones from the new Nokia-Microsoft pact if the two groups adopt a closed system akin to Apple Inc’s iPhone, an Orange executive told Reuters.

Nokia chief executive Stephen Elop (L) welcomes Microsoft chief executive Steve Ballmer with a handshake at a Nokia event in London February 11, 2011. REUTERS/Luke MacGregor

Operators such as Orange, Europe’s fourth-largest in terms of revenue and part of France Telecom, carry great power in shaping consumer phone choices because they buy the phones from the makers and decide how heavily to subsidies them.

“We want a mobile ecosystem that is open and allows our clients to use all the services they want, not closed systems that benefit one company or another,” Jean-Paul Cottet, Orange’s chief of marketing and innovation, said.

His remarks are among the first from a major operator on the alliance between Nokia Oyj and Microsoft Corp, which was announced last week in a bid to boost both groups’ presence in the high-end smartphone market.

At the Mobile World Congress in Barcelona this week, industry players have been assessing the alliance’s impact. Nokia shares are down about 20 percent since the deal emerged.

CLOSED PHILOSOPHY

Cottet said it was a bit early to know how the Nokia and Microsoft pact will play out and how operators spending on mobiles might change as a result.

In the short term, he voiced concern on how Nokia’s product launches would be affected this year. “Nokia’s new platform with Windows is planned for 2012, so what happens until then? We know what we sell of Nokia’s lineup for the first half of this year, but we are wondering what they will propose to us to sell in the second half of the year.”

In the longer-term, Cottet said operators would look to see whether Nokia and Microsoft adopted a closed philosophy like Apple. The California-based company must approve programs that run on its iPad and iPhones and it largely controls the billing relationship with the customer so as to maximize profits.

“Microsoft and Nokia are companies we both work with and respect, so for now we will give them the benefit of the doubt,” he said. “But if their interest in the medium term is to lock up the clients in a closed system, well then we would have to go look elsewhere for an open alternative.”

Cottet said Apple’s closed strategy was getting “tiresome” and wasn’t good for customers. “People don’t understand whey they buy a 600 euro tablet and they can’t see certain web pages properly because Apple doesn’t support Flash player.

“It’s as if Apple is saying, ‘you buy a car from me but you can’t drive it on all the roads, only those that I have a toll booth on.’”

He contrasted this to the more open approach of Google Inc’s Android, which launched in late 2008 and recently dethroned Nokia’s Symbian as the most popular system.

Additional reporting by Nicola Leske; Editing by David Holmes

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