Orange threatens to spoil Nokia's online music entertainment party

Orange has threatened to spoil Nokia's high-profile launch of its new music download service this week after warning that it will refuse to offer its flagship music handset to its 16 million customers in the UK unless the Finnish mobile phone manufacturer agrees to work with the operator to ensure that customer experience is paramount.

Nokia is holding a press conference in London tomorrow to detail its plans to launch a rival to Apple's iTunes in the portable music space. Although it has not confirmed its plans, the mobile phone giant is expected to launch a series of devices, including the N81 that will spearhead its entry into the mobile music sector. The service is expected to go live in the UK in November.

Despite its dominance in the mobile phone sector where it commands a global market share of more than 30 per cent, Nokia remains reliant on mobile phone network operators such as Orange and Vodafone to provide connectivity to pipe music tracks on to a user's handset. However operators are steadily increasing revenue from music downloads - more than 100,000 single tracks are downloaded on Orange's UK network every month.

Orange has refused to agree to offer the new service unless it can trial Nokia's download service against the performance of its own product. Talks between Orange and Nokia have hit an impasse and in a strongly worded memo sent to Nokia executives that The Independent has seen, Orange has threatened to "derange" the handset unless the mobile phone maker agrees to a trial.

The memo states that Nokia plans to launch two variants of the N81, one with an 8GB storage capacity and another with 1GB of storage. Orange proposes that an "open and transparent" trial is conducted to evaluate the Nokia music store using the 8GB handset to compare results with the 1GB variant that would only use Orange's own music download service. "If this proposal is not accepted, we will regrettably be forced to derange this handset," the memo warned.

The memo said it wants to source larges volumes of "the exclusive blue N81" but that if Nokia does not agree to the trial, it will work with other handset makers to fill the gap. Orange has set a deadline of 31 August for Nokia to agree to the trials.

Orange declined to comment on the memo or any plans it has to work with Nokia in the music space.

Orange traditionally works in conjunction with its handset partners to ensure that high-end devices in its "signature" range work well and that the customer experience is not overshadowed by unwieldy technological innovation. For example, the company worked closely with Sony Ericsson on its Walkman music phone.

The memo said: "We are still to see a working demo of the music store; we would expect a significant level of customer confusion and increased calls to customer services as a result of housing both players on a device and our data tariffs would be negatively impacted as they were not designed to deal with such large individual music files. In short, if this was an Orange service, we would definitely not launch yet to protect our customer experience."

Mobile internet usage has been slow to take off in Europe, partly due to poor user experience and customer confusion over the price of downloading content such as music. Large music files can take up to five minutes to download and drive up data charges unbeknown to the user.