Ben tells Jack that Naomi is lying about her identity - she's one of the "bad guys." He asks to give him the satellite phone, and when Jack refuses, Ben turns on his walkie-talkie, revealing Tom's voice. Ben tells Tom to shoot Sayid, Bernard and Jin unless he says otherwise. When Jack refuses to give in, three shots come through the walkie-talkie.
Jack beats Ben severely then promises to kill Tom.
The title references the expression "hold the phone," meaning to maintain an open connection, but in the scene it plays over, Jack holds, maintains possession of, a phone.