Nokia Gets Strong Signals from Indian Market

Nokia gets strong signals from Indian market The Financial Express: August 20, 2009

New Delhi: Nokia, the world's largest handset manufacturer and also the market leader in this segment in India, on Wednesday declared that India would continue to be a strong destination in the communications sector and the drought was unlikely to affect the company’s sales in the country, which dominates the bulk of its entry level models.

According to a study conducted by Nokia, which was released on Wednesday, the communications sector is expected to emerge as the single largest component of the country’s GDP with a 15.4% by 2014. “We have an ambitious plan to have as much possible share of that contribution,” Olli- Pekka Kallasvuo, global CEO Nokia Corporation, who's on a India visit said.

“Communications is recording a 25.7% growth in this country, a mobile phone is more of a utility purpose object than just a tool to communicate for a large number of people in this country”, Olli-Pekka Kallasvuo said. "We don't think the market will slow down for mobility in rural India," D Sivakumar, managing director of Nokia's India operations added, emphasising that given the utility of phones people in the country were unlikely to curtail their expenditure on mobile phones.

Commenting upon the sale of smartphones in India, Olli-Pekka Kallasvuo said the sales of Nokia's high-end smartphones were also growing in the country, the world's second-largest mobile market with around 430 million users and nearly 60% of mobile subscribers using Nokia handsets. "India is very often perceived to be a low-end market. That is not the case," he said, adding Nokia's high-end phone models such as N97 and N86 were selling nicely in the country.

In May, Nokia opened its online software and content store, named Ovi Store, hoping to follow the success of Apple Inc's (AAPL.O) App Store, and Olli- Pekka Kallasvuo said users India were among the top five in terms of downloads from the online store.

Nokia has embarked upon the project of micro-financing the purchase of mobile phones in order to increase the feasibility of purchasing the device in villages. The company began the project in Andhra Pradesh and Karnataka where it sold handsets on a weekly installment of Rs 100 over 25 weeks. Kallasvuo said that the company received an overwhelming response of 27,000 applications from 2,500 villages and was now planning to rollout the micro-finance scheme in 12 Indian states.

Speaking upon the company’s future growth path in India, Olli-Pekka Kallasvuo said, “India would remain one of Nokia's top growth markets, as 81 % of the country's mobile users were in urban areas and they were driving demand for high-end phones". India is the second largest revenue contributor to the Finnish phone manufacturer’s global kitty, after China.