Nokia launched its all-singing, all-dancing N95 phone with a fanfare suggesting something world-changing. Just this once, it may be true. This could be the phone that finally exposes the arrogance and stupidity of mobile operators to the world at large and, just maybe, leads to change.

The N95 has had a huge marketing campaign centering around its multifarious abilities, including 3G, HSDPA, WiFi GPS, a 5-megapixel camera and all the rest. It also comes with a native VoIP ability, similar to that in the Nokia E61 and other recent Nokia phones.

It's going to some pretty tech-savvy people, and some of them have been outraged to discover that mobile operators - including Vodafone and Orange - have disabled the native VoIP functionality, so it will also not work with 3rd party software such as Truphone

Truphone is doing its best to fan the flames, with a very clear demonstration of a crippled Orange N95 alongside a vanilla one, on YouTube.

Why the operators have done this is obvious. They make their money out of mobile voice, and a VoIP client such as Truphone allows one to make more-or-less free phone calls over WiFi. I'm a Truphone user and it works.

Feeble excuses

That hasn't stopped Vodafone attempting to justify its stance as protecting the consumer from nasty new-fangled applications. VoIP isn't mature, it told the Register, and it needs "in-depth testing, a solid end-to-end customer experience, billing integration and customer service support which is not currently available." Vodafone also warns that using another data route may cost users and they want to protect them from this.

This fools no one. "Personally, I think they're being particularly stupid to cripple a phone and not be completely upfront about it," says analyst Dean Bubley of Disruptive Analysis. "Face it, the customer base for N95s is likely to be pretty tech-savvy - if you lie to them about the device's capabilities, or don't ensure that your sales staff & customer service reps know exactly what the modified functions & policies are, then you're going to irk an awful lot of customers."

It's even more stupid if you remember the anger Verizon faced in the US two years ago when it attempted to limit Bluetooth to headphones, forcing users to do move large files over its network.

Lashing out at the handset makers?

It's easy to see that crippled phones hurt consumers, but maybe the move was actually designed to whip handset makers into line. Mobile operators have huge purchasing power and companies like Nokia are very dependent on them. That - as much as the technical difficulties - explains the slow progress of WiFi. High-end users are keen to have it, but operators don't want it. Strangely enough, it's been slow in arriving.

The arrival of WiFi capable phones, ready to bypass the providers that supply them, could be seen is a gesture of independence by the handset makers - and one that operators may attempt to hit back at.

A senior devices person at a large European operator admitted to Bubley that he might remove some VoIP capabilities, but described it as "more about stopping Nokia (or whoever) from putting Skype or similar services preloaded onto the phone when it ships," reports Bubley. "Basically he said he didn't want users to be able to make out-of-the-box VoIP calls with a competing provider on a phone he'd subsidised, and that all VoIP calls from the phone would initially be routed via the operator's own VoIP servers."

The end of subsidy?

Operators, consumers and handset makers are lined up for a fight here, and at some point it will come to a head and the likely casualty will be subsidised phones.

We are conditioned to getting phones subsidised from the operator, and paying for the services we use. In that situation, it makes perfect sense for an operator to enable or disable any services they want to. But it all needs to be more open.

"I have no problem with terms and conditions being restrictive if all parties enter into the contract with open eyes," says Bubley, "but I think there needs to be increasing transparency. If you get a subsidised phone, you should be made to sign a form which says 'I understand and agree that the operator can delete X Y & Z capabilities from the device's published specifications'."

That isn't going to happen without intervention from Ofcom - and apparently there are people making this suggestion to the UK regulator. In the meantime, the only way to be sure of avoiding this problem is to pay upfront and get a vanilla phone.

"I foresee high-end users and businesses switching over to vanilla phones (especially businesses), or churning to operators like 3 which publicly state they don't screw around with the software too much," says Bubley. This may push us away from buying our phones from the operators, he says: "I can't see anyone wanting an unsubsidised operator-custom handset that clearly has a risk that the software has been crudely hacked for 'revenue protection' reasons.

For high end users, applications like VoIP can vitally important. Bubley reports a user who expects a vanilla N95 to pay for itself quickly on business trips. In one nine day business trip, he made 137 minutes of SIP calls, saving $292.