A disagreement has erupted between Nokia and two UK mobile networks, O2 and Orange, over the manufacturer’s confirmation that it will be pre-installing the VOIP service Skype onto its latest handset, the N97.

Skype is a service allowing users to make free calls to other Skype contacts over the internet, as well as low-cost calls to other landlines and mobiles. The problem for the networks is that this could lead to more customers making calls through the free Skype service than through their networks, which will lead to a drop in revenues.

Both O2 and Orange have not come out with any public statements regarding their frustrations, but O2 has stated to Mobile Today that it is “currently working with Nokia” to “understand their Skype service”.

This is a tricky issue for the networks. They clearly don’t want to lose revenue through lost calls, but at the same time it would not be great PR for them to influence what users can and can’t have on their phones. The technology is there and it is only going to become more popular in the future, so they will have to get used to it sooner or later.

What is more strange is that other networks are not worried about the Skype application. T-mobile and 3 are both unconcerned, and 3 has even been involved with a number of phones that incorporate Skype in the past, including the INQ1 Facebook phone.

Nokia will not be in a hurry to affect adversely its relationships with the networks, but neither will it want to back down on its decision as this will not go down too well with consumers. Whatever decision is made, it is sure to have lasting ramifications for the mobile industry.