Nokia, the Finland-based mobile phone maker is planning to come up with Internet-based services for the rural Indian market according to Nokia Corporation's President and CEO Olli-Pekka Kallasvuo. This will help it to position itself effectively in the non-urban markets. The services to be offered (in Nokia's mid-level mobile devices as well) include micro-finance, distribution, agricultural services and after sales and support services.
Mobile penetration in India stands at 26 per cent at present and Nokia is looking at the micro finance initiative big time to increase the mobile penetration in India. Kallasvuo added that the initial cost of the mobile phone is a major hurdle to the Indian market which still has been untapped even though that India is adding eight million subscribers a month. Nokia India's Vice President and Managing Director D Shivakumar was of the opinion that price was not the parameter in the rural areas and people did value the brand. He ruled out coming up with a sub-Rs 1,000 (approx. less than 25 US dollars) handset for the rural market. Nokia is running pilots and trials to gauge consumer response in select markets.
Nokia's large distribution and nine language support in India should help it gain in the rural market where mobile penetration stands at six per cent in 2007 (three per cent in 2006). Nokia already has a head start on other mobile device providers with its programmes for farmers in India which include providing solutions from information on market prices for agricultural products to weather updates to financing options. Another challenge for Nokia is the rise of operators in emerging markets (like India and China) as market penetration increases. Operators already have more control in markets such as Europe and North America. Nokia, so far has taken full advantage of this, building its own distribution channel and selecting partners.
Meanwhile, Nokia Siemens Networks announced that it will be setting up a production facility at the SIPCOT Orgadam high-technology SEZ (Special Economic Zone) in Tamil Nadu to manufacture mobile phone equipment and other hardware products for the telecommunication equipment. Nokia Siemens Networks is a subsidiary of the Netherlands-based Nokia Siemens B.V. Nokia, Motorola, Samsung and several leading telecommunication equipment manufacturing companies have already set up their base in Tamil Nadu, India.
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