Nokia was prompted by a desire to foil theAndroid and iOS “duopoly” in the mobile industry to choose Microsoft’s Windows Phone 7 (WP7) platform as its primary smartphone OS, rather than Android.The Nokia CEO revealed this at the ongoing MWC in Barcelona.

“A decision to swing to Android would have tilted the mobile ecosystem in the direction of a duopoly, but we wanted to create a challenger,” Elop said.

According to Elop, the new MS and Nokia partnership will initially operate as a straightforward OEM deal. This will see Nokia pay Microsoft a fee to use its software. Nokia will thought see high value transfer, in the “billions not millions”, as reduced operating expenses and new revenue streams such as access to Microsoft’s search and advertising capabilities.

Nokia was unable to give a firm timeframe on when its first WP7 phone would appear but it is hopeful for a launch before year end. Elop was joined on stage by senior VP Jo Harlow, who said that investment in Symbian would continue – at least in the short term – prior to a “carefully managed transition” to WP7. There was very little mention of Meego.

Nokia and MS deal will also see many of their service offerings – such as Nokia’s Ovi maps and Microsoft’s Bing search engine – pooled together, while Nokia’s apps store (Ovi) is to be rolled into WP7’s Marketplace.

The deal was seen as a positive for Microsoft, which is set to benefit hugely from the support for WP7 by the world’s largest handset vendor. However, the news was less well received at Nokia, where some employees on Friday even staged a protest at a plant in Finland dedicated to the Symbian platform.