Britain's four largest wireless carriers will not sell Nokia mobile phones that offer unlimited music downloads, dealing not just a blow to the Finnish manufacturer's plans but also underscoring the tension as business models clash.

Retail stores belonging to Vodafone, Spanish-owned Telefonica's 02, Deutsche Telecom's T-Mobile and France Telecom's Orange will not sell Nokia handsets prepackaged with its Comes With Music feature. This will undoubtedly hurt Nokia's British plans for the holidays.

Reported in the British media, the decision is a hint of what is to come as manufacturers and carriers both battle commoditization with the one thing that can give them an edge over competition: content.

Under Nokia's Comes With Music program, owners of the Nokia 5310 and N95 phones will be able to download an unlimited amount of music over a one-year subscription period.

The two Nokia handsets, which had their global debut last week, go on sale Oct. 16 in Britain, one of the world's most sophisticated mobile markets.

Per a report in London's Financial Times, the Nokia 5310 Comes With Music phone will cost roughly $260, almost double the price tag for the model without the service.

That extra premium from this pay-as-you-go deal will be distributed among the participating record labels, including the Big Four -- EMI, Sony BMG, Universal and Warner Music.

On the other hand, the N95 Comes With Music phone is tied to monthly contracts with carriers. British wireless products retailer Carphone Warehouse, which will sell both Nokia models, has not yet released its pricing structure for this phone.

The good thing about Comes With Music is that Nokia owners of these phones get to keep what they downloaded even after the subscription has expired.

Nokia will share the revenue from sales of such music-enabled handsets with its record-label partners, who themselves are suffering falling sales of packaged music from Web piracy and an increasingly monopolistic Apple iTunes online store.

Nokia will next year take its Comes With Music to continental Europe and Asia.

In Britain, Nokia will rely on its own Nokia store in London and Web site as well as Carphone Warehouse to sell these models. Best Buy Co. in May announced the $2.1 billion purchase of a 50 percent stake in Carphone Warehouse, thus entering the European retail mobile phone market.

Carriers' bag
Let's first look at this development from the carrier's standpoint.

The growth of the mobile Internet -- already at 16 percent penetration of all mobile subscriptions in the United States and higher in some European and Asian markets -- threatens the carrier's role as gateway to the Web and walled-garden services from its own on-deck portal.

Next, while data is sketchy, it would seem that on-deck content consumption may at some point be eclipsed by off-deck.

Carriers will still have a role to play in such areas as ringtones, wallpapers, offering video and television services, and portal services. But content yearns to be free and mobile will inevitably follow the traditional Internet's model.

Add to that the carrier worry of what effect this content consumption will have on its network resources.

Who is to blame if the network slows or collapses because of the quantity of requests for content on mobile and the sheer bandwidth that requires?

Biggest of all, carriers want to avoid the fate of some Internet service providers -- simple bit pipes for content. No two ways about this: they want to monetize their key asset -- access to the millions of customers in their database.

A corollary to that point is a major worry of the effect that the plethora of laisser-faire content services have on the subscriber experience.

Carriers may not want to risk the ultimate ire of angry customers for experiences they have not sold but simply delivered. A ticked-off customer is a cancelled or non-renewed subscription.

So, understand the four British carriers' current decision not to carry Nokia Comes With Music phones in that light.

There's another wrinkle that's local to the British market.

Mobile phones tied to monthly contracts with carriers typically are offered free to consumers. Carriers make their money back through the monthly contracts.

In the N95's case, the expectation, it would seem, is that Nokia expects the carriers to absorb the cost of this device. The carriers may have balked.

In any case, this reluctance to support Nokia's Comes With Music may be a bargaining tactic for the carriers. They may seek better terms, or even a cut of the revenue from the increased cost of the phones.

Takers, not makers
But some of the same arguments made for carriers can also be made for handset manufacturers: commoditization of services and hardware features, lack of consumer loyalty except in the case of the Apple iPhone and the BlackBerry, and dumb instrument for smart content.

In addition, the lead time that manufacturers had for innovation on new phones is decreasing due to intense competition and improved technology. Which is the one area that is a constant source of change, has addictive qualities and possible revenue potential? Content.

The case can be made that brands should stick to their knitting.

After all, what is Nokia today? It offers mobile phones, runs a mobile ad network, has huge investments in mobile software and is a seller of music. It still is the world's largest maker of mobile phones and that's the current positioning in consumer minds.

But Nokia knows that betting the house on hardware or software is not going to work. It has to have fingers in the content, commerce and advertising pies. Because ultimately mobile is about content -- spoken, viewed and written. And if marketers don't have skin in that game, they risk irrelevance over the long term.

Carriers face the same dilemma. They too want a share of the content, commerce and advertising pies. And they are in a commanding position, at least until the mobile Internet achieves universal penetration, to engage in block-and-tackle.

Both handset makers and carriers want to be the ultimate gatekeepers of the mobile experience. They see the Apple iPhone and even the BlackBerry and wonder why it can't be replicated.

What these players shouldn't forget in their jostling for gatekeeper status is that the consumer experience is what counts most. The iPhone wins plaudits for its wonderful Web experience and ease of use. The BlackBerry is email's best friend.

Carriers and handset makers need to knock heads together and collaborate. There's enough room for all players to grow since mobile is the future of content and the Internet. But they will have to set aside that gatekeeper mentality and start singing a different tune.