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Telecom Services V&D 100

Top10 Vendors: 1 - NOKIA: Numero Uno

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Voice&Data Bureau
New Update

A good fiscal means maintaining your leadership position in the
key segments where you operate. In the case of Nokia India, the mobile devices
and network infrastructure major fared well in all categories and it had a slew
of innovations to crow about.

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Nokia India has bagged some major network orders, and
increased the market share in mobile handset market. Its total revenue increased
to Rs 15,891 crore from Rs 12,062 crore, clocking a 32% growth. During FY '06-07
revenue from handset sales was Rs 11,486 crore, while network revenue was Rs
4,405 crore.

It is worth mentioning that in 2006, Asia Pacific accounted
for 20% of Nokia's net sales. Last year, Nokia introduced 39 new mobile device
models, including 11 CDMA models. Of the total devices introduced globally, 23
were in the mid- or high-end, while seven were at the entry level.

Nokia had a 'lot of firsts' in its kitty during the last
fiscal. Its first Universal Mobile Access (UMA) product, the Nokia 6136 and
Nokia 6086, was announced. On top of this, it launched the thinnest mobile
device-the Nokia 6300.

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Nokia has also expanded the range of music-optimized devices
with the Nokia 5300 XpressMusic. It has also widened its color screen product
offering for entry users with the launch of Nokia 2310, 2610 and 2626 color
display models.

However, on the CDMA front, it had taken a beating. In June
2006, talks between Nokia and Sanyo to form a new jointly-owned CDMA mobile
device company had collapsed. After scaling down its CDMA research and
production of CDMA phones, Nokia is planning to work with co-development
partners in a bid to selectively participate in key CDMA markets.

Nokia was the front-runner in almost all deals with major
gains including the $400 mn network expansion and managed services contract with
Bharti Airtel, a five-year managed services deal with Hutchison Essar, BSNL
expansion contract in north and south etc. The $400 mn agreement with Bharti
Airtel is to expand its GSM/GPRS/EDGE network in eight circles and deploy a WAN
India WAP solution across its network.

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Areas of operation:


Wireless Infrastructure, GSM HandsetsADDRESS: Nokia India

5F, Tower-A&B, Cybergreen, DLF Cyber City

Sector-25A, Gurgaon - 122 002, Haryana

Tel: 91-124-4199000

Fax: 91-124-4199104

WEBSITE: www.nokia.com

Highlights

  • Strengthening R&D focus

  • Started manufacturing in
    India through Foxconnn

  • Acquisitions to power
    innovations

  • Selected India as the
    globalization center

  • Increased thrust on SMBs

  • Ensured 80% share in core
    routing and switching market

Following the announcement in June 2006, the merger between
the networks business group of Nokia and the carrier-related operations of
Siemens is effective from April 2007, and the new company is called Nokia
Siemens Networks. This would make a significant impact in the market as it will
be a leading player in the wireless and wireline segments with a full range of
product portfolio. It has already made its mark in the Indian market bagging a
$500 mn network expansion contract from Idea Cellular.

On the R&D front, Nokia has done exceptionally well. Nokia
has expanded its R&D facility in Bangalore with the inauguration of a 210,000
square foot development center.

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'What one looks in a phone, we
deliver'

How would you rate Nokia India's performance last year and what
are your plans this year?


It was a good year and, as a market leader, the challenge is to grow the
market. We held our position as a market leader and did well in all categories.
We had a string of innovations in the last 12 months be it N-95, E50, 6100 and
1600. There are shifts happening as we go forward. From September onwards we
have 6-7 mn net adds and it is around 80-90 mn every year. In future, bulk of
the subscribers will come from rural and smaller markets. So the focus is on
making the distribution right and cost effective for all consumer markets. In
the last 11-16 months, there has been a drive on the replacement market.
Innovation and good communication will be a big challenge for replacement as
well as first time users.

S Shivakumar

VP and managing director

What do you feel are the main reasons for your excellent
performance in FY '06-07? And thereasons for maintaining or increasing your
market share year after year?


Our consumer understanding is very good. What one looks in a phone, we
deliver. We have focused on product range, competitive pricing, and good
distribution lead, and continue to maintain lead vis-à-vis our competitors. Out
of 90,000 retailers, around 30,000-35,000 are single brand shops that sells
Nokia. In care, we have dramatic jump and around 92% complaints are handled
within 24 hours. We have a huge benchmark as we have the best care network,
excellent distribution network, and strong brand followed with product
portfolio. And all the divisions have worked hand in hand to take it to the next
level.

Last year, the main focus was on manufacturing and you have
performed exceptionally well and manufactured 25 mn plus handsets. What's the
manufacturing plan in 2007 w.r.t. manufacturing, indigenization and exports?


We have invested US $150 mn in the manufacturing plant. Component players
are planning to invest US$350 mn. So the total investment is worth US $500
million. And this is the highest investment in terms of telecom manufacturing.
We started India plant to cater to India but we are also exporting handsets to
South East Asia. Indigenization and component manufacturing will depend on how
quickly the component manufacturers want to do it. In terms of manpower, it has
around 4,100 people.

In 2006, there has been a change in Nokia's distribution
strategy. Would you demystify your distribution strategy?


HCL and Brightpoint are our national distributor. We have the largest network in
the country and have a significant reach. Nokia also directly handles around
one-fourth of the 90,000 retailers. On the service front, Brightpoint and HCL
take care of the service network.

Any revamp on after sales service strategy of Nokia India?


We have handsets that are available in more than 80-85 million people.
Servicing and catering to such a population has been a mammoth task for the last
one year. Our turnaround time is 24 hours for 92% of the cases. We are also
experimenting with N-Series phone in New Delhi where 80% of the time we return
the phone in one hour by appointment and make it as consumer friendly as
possible. This has worked very well and we plan to continue, as a phone is the
lifeline of a person. The shorter the time for handset care, the higher the
stickiness of the customer. So, the focus is on differentiated care for high-end
phones.

Nokia, which is scaling new highs on the innovation
initiatives, inaugurated its maiden 'global format' concept store in Chennai.

Being a market leader, the core challenge for Nokia is to grow the market.
Facts such as an innovative approach, consumer understanding, competitive
pricing etc will be taking it to new horizons in coming months. Nokia will
continue to target an increase in its market share in mobile handsets in 2007.

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