Historically when someone bought a mobile phone they did so from one of the major mobile operators e.g. Vodafone, O2, Orange etc and the relationship with that customer was owned by the network. If anything went wrong with the phone, regardless of whether it was on prepay or on a monthly contract, it would be the network that would be contacted by the customer in order to resolve the issue. Any firmware updates would be pushed out by the network, after they have received, tested and added to the software update provided to them by the handset manufacturer. Today the situation has changed following the introduction of Google, Apple and HTC.

I own an HTC Magic and there is a buzz of excitement across all Magic owners as we wait for an update to the Android operating system. Speaking to Vodafone they have confirmed that the update comes directly from Google and they are not aware when it will be delivered or what exactly will be included. With the Iphone, the OS updates are provided by Apple so the operators’ role is diminishing.

Apple is keen to stress that it, rather than the operator, owns the relationship with the customer.  Vodafone et al would argue that as they own a billing relationship the customer is theirs. This highlights another change, never before has a handset manufacturer or OS provider had a billing relationship with the ‘operator owned’ customer (the handset owner). Now, Nokia through OVI, Apple through their app store and Google through Market all have direct billing relationships with the customer. However the Mobile operators arent taking this lying down especially T-Mobile and Vodafone.

Vodafone has sold own branded handsets for a good number of years and most of the recent press releases and market announcements reiterate Vodafone’s stance that it does not want to be a dumb pipe rather a rich provider working with others to provide the best services, sharing revenue. The company recently announced the release of Vodafone 360 which includes two exclusive handsets that Vodafone has developed with Samsung, but its the choice of operating system that highlights the company’s intent to stay visible. Instead of taking the easy option by choosing Google’s Android OS, it went for a little used open source LiMo OS. The LiMo foundation formed by a number of large companies but has no large brand i.e. Google, that Vodafone has to compete with. The OS therefore becomes invisible to the customer as its the handset and more importantly the services offered that Vodafone wants the customer to know, see and want.

Vodafone 360 includes handsets, heavily branded navigation, store which will sell apps, music, themes etc and Vodafone People, a social networks meets enhanced address book. 360 has already been referred to as the “Walled Garden 2.0″ which isnt necessarily a bad thing but shows that Vodafone want the user to use as much of their stuff as possible.

T-Mobile and to a lesser extent O2 have produced applications for the Android and Apple handsets respectively. Its quite a clever move by T-mobile as most of the apps are not restricted to T-Mo handsets. Im a Vodafone customer and employee but I have a T-Mobile application on my handset and there isnt anything that Vodafone can do about all customers following suit.

So it remains to be seen whether Vodafone, T-Mobile and other network operators can prevent themselves becoming faceless pipes. If my handset is updated and fixed by someone other than the network, if I am free to buy my apps, music and games from whoever I want then my network automatically becomes a dumb pipe as all I want from them is good coverage and fast internet access.

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