The agreement is exclusive with 3 in the eight markets where it operates, but Skype, banking on a mobile future, is seeking partners elsewhere.

The phone was made for 3 by Chinese manufacturer Amoi. Development was jointly done by 3, Skype, and Amoi, but it also included Qualcomm to enable Skype to work with core handset features such as address books and messaging.

The phone will be available free to 3’s 18-month contract holders and for £49.99 ($102.88) to its prepay users. A centrally located button marked Skype changes the phone’s mode from regular cell phone to Skype phone. Skype IM is also supported.

All calls and messages done on Skype will be free, but Skype Out, the low-cost calling feature to regular phones, is not enabled. Skype Out will be made available sometime next year, however, the two companies said.

3 operates mobile phone networks in Austria, Australia, Denmark, Hong Kong, Ireland, Italy, Switzerland, and the U.K. The phones will be available in Ireland and the U.K. on Friday with the other markets following in the coming weeks

Getting mobile operators on board hasn't been easy. 

“We have had a number of discussions with operators over the years and some have told us to go away,” said Michael van Swaaij, acting CEO for Skype in the wake of founder Niklas Zennstrom’s departure. “There’s an obvious tension.”

3 U.K.’s CEO, Kevin Russell, said that free Skype calls would detract from its revenue but that he expected to more than make up for this with “incremental customers”, not just by attracting Skype users who do not currently use 3 but by reducing churn and benefiting from increased customer loyalty. 3 has since its launch had one of the highest churn rates in the U.K. because of an early decision to compte on price. It has since changed course to a services-based strategy.

Neither Skype nor 3 would disclose details, but Skype will receive a share of the revenue on the new phone’s usage. Skype also receives a royalty paid by 3 for the provision of its software. There is also the potential that 3 will receive a share of Skype’s Skype Out revenue when that service is made available.

Hutchison-owned 3 has some 4.5 million customers in the U.K., its biggest market, over 3.5 million of whom are thought to be active users. Skype has some 246 million registered users.

Skype parent eBay was recently forced to take a $1.43 billion write-down because revenue had not met the targets expected at the time of its £2.6 billion acquisition in 2005. Co-founder and then CEO Zennstrom stepped down coinciding with the announcement of the write-down.

The investment was led by 3i and included Scottish Equity Partners and TTP Ventures. Carbon Trust put in $4 million.

CamSemi is a so-called fabless semiconductor maker, a chip maker that designs and sells but outsources the manufacturing, or "fabrication," to an outside facility.

Energy lost in the form of heat, such as when computers are in standby or cell phones are charging, is a persistent problem companies are trying to solve. Both environmentalists and governments are getting into the act.

The deal promises to give BT’s 3 million Total Broadband customers access at no additional charge to FON’s network of roughly 190,000 Wi-fi access points. The move gives the UK telecom company a quick jump in its public access Wi-Fi coverage at a minimal cost, Ovum analyst Mark Main said.

Google, Skype, Index Ventures, and Sequoia Capital are early investors in Madrid, Spain-based FON, which grabbed $21 million in its first round of funding. Formed in April 2006, FON is a network of private Wi-Fi access points that have agreed to join together in exchange for access to each others’ Wi-Fi hot spots.

Those contributing Wi-Fi to the FON network, dubbed FONeros, pay nothing but outside non-contributing users are charged a fee for access. The Wi-Fi startup says that is has so far brought in over 500,000 users of its service who share access to 190,000 Wi-Fi hot spots worldwide.

Financial terms of BT’s investment in FON were not disclosed.

BT already operates 12 municipal city-wide Wi-Fi access zones in the UK and a number of public access coverage areas in restaurants such as McDonald’s as well as public transportation areas dotted around the country. It also has a number of roaming agreements with other public Wi-Fi networks in the UK and abroad.

BT’s battle for Wi-Fi supremacy won’t be easy. Rivals include T-Mobile and Vodafone as well as a growing army of those from mobile network-based 3G Internet access. In recent months Hutchison 3, T-Mobile and Vodafone have all announced 3G mobile broadband services in the UK aimed at users of portable computers.

WiMAX, heavily backed by Intel Capital, is seen as another next-generation wireless access competitor, promising yet another form of wireless public access to the Internet.

Some reports said O2 agreed to hand over as much as 40 percent of revenues it receives from iPhone calls and services, much higher than the 20-30 percent that analysts had predicted. However, an O2 spokesman described the reports “as being way off of the mark.”

O2, owned by Spain’s Telefonica, will for an unspecified “multiyear period” be the exclusive operator to offer the iPhone in the UK following its launch on November 9 , the spokesperson explained.

The handset will be sold via the outlets of independent mobile phone retailer Carphone Warehouse and through Apple’s own stores giving it some 1,300 retail points throughout the U.K..

O2 success in clinching the iPhone deal was widely predicted. Orange is expected to be Apple’s partner in France and T-Mobile is believed to have reached an agreement for sales in Germany, although the two carriers have not made any announcements.

Apple boss Steve Jobs indicated at the announcement that he was traveling to another destination in Europe before heading home. He would not say where.

Something of a surprise however, was the decision by Apple to launch a non-3G version of the phone in Europe ahead of an upgraded 3G model late next year. The O2 device is the same as the 8Gb model launched June 29 and currently shipping exclusively via AT&T in the U.S.

It has been priced at £229 ($457) plus sales taxes and will be available on three tariff plans set at £35, £45 and £55 per month over a minimum 18 month contract. The iPhone’s price was recently reduced to $399 in the U.S. O2’s plans will include unlimited data (subject to a 200Mb fair use policy) and will also include use of The Cloud’s 7,500 public WiFi hotspots with seamless hand-over.

Given the fact that Apple decided to launch a non-3G model, of all the U.K. operators O2 was the right choice for Apple, said Ken Blakeslee, principal of U.K. based tech investment advisors Webmobility.

“From the early days of mobile data it has been trying hard to open up the mobile phone to non voice uses such as Internet access, blogging and social networking,” he added. “Up till now the devices have been a bottleneck to achieving this. This device opens up the bottleneck.”

Not all the commentary has been so positive, however.

“We think that this is simply inadequate and will frustrate a lot of users who take their iPhone to their parents’ house in, for example Cornwall, at Christmas and say 'look how great this is for web browsing',” said Martin Garner, director of wireless intelligence at London based information and communications technologies analyst, Ovum.

“Certainly the deal with The Cloud is good for users and will help in urban areas and in people’s houses, but it will not mean much in rural areas.”

The deal also reflects the Finnish handset maker’s effort to transform itself into a software and services company. Financial terms were not disclosed.

Enpocket displays advertisements on cell phones in various formats, including banner ads, video clips and text messages. It works very closely with carriers such as Sprint Nextel and Vodafone, combining operators’ customer data with real time information, such as a subscriber’s location and key words searched, to place ads that generate higher response rates.

"Enpocket is a good catch for Nokia,” commented Eden Zoller, principal analyst at London based management consultancy Ovum. “It is a well established mobile advertising specialist and one of the stronger players in an increasingly competitive, consolidating market,” she said.

Bena Roberts, founder and senior analyst at BKI Media, a UK-based mobile media analysis company, said the acquisition will put Nokia at both ends of the carriers’ value chain. The Finnish group already supplies devices that subscribers use to access carrier networks and it would also be in a position to deliver advertisers to the network – a very important new source of revenue for wireless operators.

“If I were an operator I would be scared,” she said. “It’s very frightening to think that a mobile manufacturer has that much value in the chain.”

The Enpocket deal follows Nokia’s announcement earlier this month that it intends to shift its emphasis towards software and services. Nokia described the move as “an important element in monetizing those services for our customers and partners.”

 “This will definitely put them in a more consumer facing position,” said Ian Maude, Internet advertising analyst at London-based telecommunications and media consultancy Enders Analysis.

Enpocket is backed by BlueRun Ventures, GrandBanks Capital, Dolphin Equity Partners, Brú Venture Capital.

“We’re profitable enough, we’re growing fast enough. We’re just going to put (the money) on our balance sheet,” said OANDA president Michael Stumm.

But having the money on its balance sheet should allow OANDA to enter into licensing deals with major financial institutions. An agreement with an unnamed European bank is set to be announced Tuesday.

OANDA’s foreign currency exchange was launched in 2001 by Swiss entrepreneurs Richard Olsen and Mr. Stumm. It allows retail investors to use the Internet to speculate or invest in foreign currencies, a province of financial investments previously reserved for institutional investors with minimum trades of $2000. The minimum trade at OANDA is $1.00.

The company has since executed more than 270 million currency swaps and on peak days it handles more than $10 billion in trades, according to Mr. Stumm.

OANDA’s latest funding was provided by late stage investor New Enterprise Associates, as well as institutional investors Cascade Investment, Legg Mason and T. Rowe Price. Series A investor Index Ventures also participated.

The foreign exchange market is bigger than both the Nasdaq and the NYSE combined, said Danny Rimer, OANDA board member and partner at Geneva and London based Index Ventures. Between $1.5 trillion and $3 trillion is traded a day in buying and selling currencies, he added, and unlike most markets it is truly global and trades 24 hours, seven days a week 365 days a year.

But, he added, “the current system is incredibly inefficient,” with currency buyers forced to agree to fixed rather than current rates and forced to pay commissions. “There is no reason why trading currencies shouldn’t be as easy as trading stocks,” he added

When Index led the A round two years ago, at $17 million it was the biggest single investment the VC firm had made.

“There are half a dozen other foreign exchange trading providers out there but we invested in these guys because we believe they are the most automated of all of them with a quarter to a third of the employees of the others,” said Mr. Rimer.

According to London-based analysts, The Mobile World, there are now over 3 billion mobile phones in use worldwide, and roughly half the world’s population is expected to own a mobile phone before the end of the year. Of the 3 billion phones, more than 2.5 billion are based on GSM or the updated 3GSM standard.

What marked GSM out from any previous mobile phone system was its ambition. From the outset it was designed to be used while traveling abroad, at first within the countries of the European Union and ultimately across the globe. And along with this came its renaming from Groupe Spécial Mobile to Global System for Mobile communications.

As it happens, however, GSM was not the first mobile phone system to allow cross-border use. This distinction went to B Netz based on technology from Dutch electronics giant Philips, but its area of use was limited to German speaking countries in Europe. The Nordic Mobile Telephone system which allowed roaming between Denmark, Finland, Norway and Sweden also predated GSM. There is some controversy about whether these were genuine roaming arrangements, however, as inter-carrier billing was very rudimentary if carried out at all.

GSM and 3GSM are today used by 700 mobile operators in 218 countries and territories. The global mobile services market accounts for about 1.6 percent of global GDP, as mobile users purchase more than 1 billion new handsets, make more than 7 trillion minutes of calls and send about 2.5 trillion text messages every year, according to data from GSM Association, the industry trade body.

“GSM is the single most important agreement in the history of telecommunications,” said Sir Christopher Gent, one of the original signatories of the agreement and former CEO of the world’s largest international mobile phone network operator Vodafone. “With 2.5 billion users around the world today, it has done more to bridge the digital divide than any other innovation, and is a tremendous example of global cooperation.”

GSM may have been a European invention but the mobile phone itself was a U.S. invention. The earliest patents are for pay phones mounted in railway cars and date back as far as the 19th century. Instead of radio technology, these early mobile phones used the railway tracks as signal carriers. The earliest radio-based devices appeared in the 1940s based on wartime radio technology.

It was also during World War II that Bell Labs developed the idea of cellular radio on which all modern mobile phone systems are based. It took almost 30 years, however, for semiconductors and batteries to mature sufficiently for the concept to be turned into a reality with the first cellular radio systems, albeit analogue technology based, appearing in Japan (NTT) and the U.S.A. (AT&T) to be followed soon after by Europe (NMT).

The company, which controls about one-third of the worldwide mobile phone market, said it had already signed a deal with U.S. carrier Sprint to make the new tablets available to subscribers in the first half of 2008.

“We are preparing for the day when people are carrying computers in their pockets and not phones,” said Nokia vice president Ari Virtanen.

Nokia did not rule out the possibility of also incorporating a cellular radio to the series at some stage in the future but said it would not be with the next product release. That would be a commercial decision not a technical one, said Mr. Virtanen.

Nokia’s tablets are pocket computers that feature short-range WiFi technology and high resolution screens that allow users to surf the web, make Internet Protocol phone calls, and send and receive email and text messages.

Helping to bridge the divide have been Nokia’s most recent mobile phones, such as the N95 and E90, which also sport WiFi and Bluetooth technologies. This means that users can browse the Internet or make phone calls by-passing their cellular carriers’ networks.

Internet tablet sales are steadily increasing although they are still not at mobile phone sales levels, said Mr. Virtanen.

Convergence between mobile phones and computers will continue and Nokia will lead the trend by approaching it both from the mobile phone and computer ends, he said.

“Today’s phones with computer capabilities are still phones at the heart,” he said. “We are making devices with computers at the heart and phone functionality on top.”

Nokia last week announced a corporate strategy shift that moves the company away from being a mobile phone maker and closer to that of an internet services company. This has in fact been a long-held ambition of the company but one which it now acknowledges publicly.

Computer maker Apple’s entry into the phone market may have hastened Nokia’s decision to go public, as may have reports of similar plans by other computer related companies such as Google and Microsoft.

New telecommunications technologies and the opportunities they bring are available to developing countries at an unprecedented level, says the report, Trends in Telecommunication Reform, 2007. Even the investment funds are available to pay for them, say the report’s authors. What is, however, all-too-often lacking is the right regulatory framework to support development.

The report lists a series of measures that developing countries should undertake in order to ensure they reap the benefits of information technology and do not wind up on the wrong side of the so-called "digital divide."

Next-generation networks offer the opportunity for developing countries to leapfrog several generations of technology, said Susan Schorr, the report’s lead author and senior regulatory advisor at the ITU’s Telecommunications Development Bureau. But in order to gain this advantage regulators and policy-makers in these countries need to better understand the technologies involved, she added.

The key obstacle to progress is all-too-often the licensing framework, she said. Regulators and policy makers need to ask themselves whether their way of regulating presents market entry barriers that may deter would-be investors, whether the regulatory framework is technology neutral.

“We have definitely seen a lot of progress throughout the developing world,” said Ms. Schorr, “but we need to see a lot more.” She cited Kenya, Mali, Nigeria and Tanzania as positive examples having all recently introduced technology neutral licensing.

The ITU is the Geneva, Switzerland, based United Nations agency responsible for information and technology issues. Some 150 of the ITU’s 191 member states are classified as developing countries with 50 of these classified as least developed countries.

At a press conference in London on Wednesday, the company unveiled the Nokia Music Store, an Internet music download service, similar to Apple’s iTunes, which will be available to users of specially optimized Nokia phones. The company, which controls more than a third of the worldwide cell phone market, said it would wrap its new music service and its N-Gage online game service into an Internet package under the company’s new Ovi brand.

The Ovi service will let users access their existing social networks, communities and content. The company said it was planning to launch more Internet services under the Ovi brand in the coming months.

The Finnish group also announced a new version of its flagship N95 phone with a more user-friendly interface and up to 8 gigabytes of storage—the same as the iPhone.

Nokia CEO Olli-Pekka Kallasvuo said the future of the company will lie increasingly with services.

“Nokia is already the number one mobile device company, he said. “Looking into the future,” he added, “we will deliver great devices, combined with compelling experiences and services, to make it easy for people to unlock the potential of the Internet.”

The next 12 months, he said, will see the company “integrate new user interface elements, service suites and web communities to Ovi.”

Nokia Music Store pricing is pitched straight at Apple’s iTunes. Individual tracks will cost €1.00 ($1.36) and albums will cost from €10.00 ($13.62). A computer-only streaming option will be made available at a monthly subscription of €10.00 ($13.62). The service is to be rolled out across Europe starting in the fourth quarter if this year with Asia following in the first half of next year.

Further adding to the anti-Apple flavor of the announcements, Nokia has chosen Microsoft’s Windows Media Audio (WMA) format for the music tracks. The company said it was emphasizing an open standards approach to the Internet. Without mentioning Apple, Nokia communications manager Kari Tuutti emphasized that Nokia “was not locking people into a specific device, unlike some of our competitors.”

The launch of Apple's iPhone in June marks the first time a new phone brand has been able to make a significant inroad into the 1-billion-unit-per-year market. This alone would be disturbing to Nokia, but Apple's ability to wrestle a significant slice of service revenues from operators, a long cherished Nokia ambition, must be even more vexing.

None of the so-called iClones are usable in the U.S. because they have instead been configured for the European GSM mobile standard. And none  of the fake phones look as though they would give the real thing much competition if the iPhone were already available in Europe or Asia.

Apple has said the iPhone would not be available in Europe for some months after the device's June 29 launch in the U.S. Asian consumers would be able to get their hands on an iPhone until next year. This delay has given enterprising Chinese manufacturers a window of opportunity.

The most prominent iPhone clone on eBay is the P168 from CECT. It looks a great deal like the iPhone--at least when viewed on eBay's auctions site. Like the iPhone, the CECT model has a 3.5-inch color touchscreen, a two megapixel camera, a music player and video player. It can also accommodate an external SD flash memory card. It has been attracting sale prices of between $200 and $400.

The newest iClone is the Meizu M8, which also looks quite similar but is marginally smaller than the iPhone. With 8 gigabytes of storage, WiFi capability and a GSM-EDGE radio interface, the Meizu's specs are comparable. But Meizu has already announced that it will also make a 3G version that will be compatible with China’s homegrown TD-SCDMA network technology.

But buyers should beware. Online reports from people who said they've seen the clones up close indicate the quality of the device and its user interface are markedly inferior to those of the iPhone. And some units for sale will prove vexing to use--especially for those who cannot read Chinese.

And then there's the FT4021 from I Fighting Industrial, which is brazenly featured on the company’s web site as an “iphone MP4”. But there is one small problem--the FT4021 isn't a phone, it is just a media player.

Additions to India’s mobile phone subscriber base are happening at a rate of more than 6 million new subscriptions a month. Total subscriber count as of the end of July 2007 stood at about 118 million.

In 2005 the country came fourth in Nokia’s sales rankings, after China, the United States, and the U.K., and by 2006 it had moved up to third. As of the past quarter it had taken the No. 2 spot. Nokia wouldn’t say, however, exactly how many handsets it is selling in the Indian market.

Visiting India, Nokia CEO Olli-Pekka Kallasvuo told reporters in New Delhi on Thursday that growth in India has happened faster than initially expected. And as a result the company is investing heavily in the country. In 2004, he said, the company had just 450 employees in the 1.13 billion population country. Today there are more than 9,000. And he predicted that Nokia India would continue to grow at a fast pace.

Its Sriperumbudur, Chennai, manufacturing plant, which was built to supply domestic consumption alone, is now exporting to 58 countries and has churned out 60 million handsets since its inauguration a year and a half ago, he said. Half of the production is being exported to customers in Africa, Asia, Australia, the Middle East, and New Zealand.

Nokia also recently set up a design studio in Bangalore to explore design ideas for the Indian and export markets. The studio was established in conjunction with the Srishti School of Art, Design, and Technology. The idea is that students at the school work together with Nokia’s own designers taking not only the principles of industrial design into account but also ethnography. India is one of the most culturally diverse countries in the world.

Nokia subsidiary Nokia Siemens Networks is also India’s leading provider of mobile network infrastructure. It too has plans to locate manufacturing in India, with a plant slated for Tamil Nadu for wireless network equipment. It’s also expanding an existing R&D center. More than $100 million has been set aside by the telecommunications equipment maker for investment in India.

In its annual review of the $100 billion U.K. communications scene published Wednesday, Ofcom said more people regularly use mobile phones and surf the Internet, while fewer consumers spend time watching television, listening to the radio, chatting on their landline phones, and playing console games.

Adoption of new technologies has been quickest among young users. Some 53 percent of U.K. residents under 15 year olds make regular use of their mobile phones compared to 50 percent in 2005, says Ofcom. They are also surfing the Internet more with 52 percent making regular use of the internet compared to 47 percent in 2005. But fewer are playing console and computer games with just 53 percent regular players compared to 61 percent in 2005.

Across all age groups in the U.K., daily Internet use is up 158 percent on 2002 at 38 minutes and time spent on the mobile phone is up 58 percent at almost four minutes per day. Time spent watching television, however, is down 4 percent at 3 hours and 36 minutes, listening to radio is down 2 percent at 2 hours and 50 minutes and time spent on a fixed line phone is down 8 percent at seven minutes.

Some 9 percent of U.K. households rely on the sole use of a mobile phone for their communications link. This figure has for the first time overtaken that of the number of households who rely on a fixed line as their sole communications link which stands at 7 percent.

But while U.K. consumers are using more communications services, the amount they are spending on them is falling. In 2006, average household spend on communications services was £92.65 ($185) per month, down from £94.03 ($188) in 2005.

The only U.K. age group to make greater use of older electronic media is that of the over 55s, the so-called silver surfers. Average radio listening in this group is up 5.5 percent over 2002. But they are also increasing their user of new media such as the Internet spending 42 hours online a month, more than any other age group. One quarter of all U.K. Internet users are over 50 and the over-50s account for 30 percent of time spent online.

The full report is available online at: www.ofcom.org.uk/research/cm/cmr07

Apple is not going for a single carrier approach to selling its iPhone across Europe but has opted instead for individual national partners in key strategic markets, according to a report.

The company has already signed up Deutsche Telekom, owner of T-Mobile, for exclusive sales of the iPhone in Germany; O2 for the U.K.; and Orange for France, according to a report in The Financial Times Deutschland. All three of these companies operate networks in other European countries, but the deals are said to be exclusively for the companies’ home markets.

Earlier reports suggested that Apple might be heading for a single pan-European agreement with Vodafone, but these were quickly denied by the carrier and attracted no comment from Apple.

The Financial Times Deutschland report says the partnerships are to be announced at the International Funkausstellung (IFA) consumer electronics fair to be held in Berlin later this month. The report also says the carriers have agreed to pay Apple 10 percent of any revenues arising from use of the iPhone. That’s said to include voice and data usage.

If true, this marks a significant departure from established practices, said Carolina Milanesi, research director, U.K., for the Gartner Group. It could also change the way cell phones are sold in Europe, hastening the demise of handset subsidies, she added. That in turn would raise the price of handsets for consumers and put the emphasis of competition between carriers on service packages and tariffs.

In most European countries subsidies are well entrenched, with few consumers in markets such as the U.K. paying anything at all for the handsets and instead opting to lock themselves into 12 to 24 month contracts. Though both Apple and AT&T have remained tightlipped about this, it is thought that the iPhone is currently being sold in the United States without subsidy.

At the same time, other handset makers are known to be looking at ways of gaining access to service revenues. So far carriers have fought against any attempts by manufacturers to share service revenues. The Apple deal could be a landmark change, said Ms. Milanesi.

Other manufacturers may now seek similar deals, she said. Another possibility may be for manufacturers to launch their own services such as paid-for music downloads or streaming. But that could in turn make carriers less willing to subsidize sales of their handsets, said Ms. Milanesi.

In the United States, Apple has an exclusive two-year agreement with AT&T. UBS said in a research note earlier this week that the iPhone on the AT&T network could outsell Apple’s own projections. It said that though Apple predicted sales of 730,000, it could end up selling more than 800,000 of the phones in its first quarter.