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India surges ahead of US and UK to become world's second largest mobile phone market for Nokia handsets

With India emerging as the world’s fastest growing mobile market with over 6 million new subscriber additions every month coupled with the lowest tariffs, Nokia has surpassed its own target almost three years ahead of schedule.

NEW DELHI: Nokia, the world’s largest mobile handset maker, on Thursday said that India had overtaken the US and the UK in the second quarter to become its second-biggest market by volumes after China. The company also produced 60 million handsets at its factory in Chennai since it was set up 18 months back and 50% of these were exported to 58 countries, Nokia’s Worldwide CEO Olli-Pekka Kallasvuo said in Delhi on Thursday.

The company also plans to make India its global export hub. “We do not look at the Chennai plant as a facility which caters only to the needs of this country, but we are looking at this unit as a global plant for global operations,” he said. Mr Kallasvuo, however, refused to divulge the number of handsets that Nokia had sold in India during the second quarter. As per data compiled by research firm Gartner, globally, Nokia had sold 100.8 million phones in April-June and also commanded a market share of 36.9%.

Mr Kallasvuo, who arrived in India on Wednesday, is on a three-day visit, where he will meet government officials, clients and component suppliers. He also reiterated NSN-Nokia Siemens Network’s, a JV with Siemens, recent commitment to invest $100 million in India over the next three years, a significant part of which would go towards the setting up of a network manufacturing plant in Chennai.

With India emerging as the world’s fastest growing mobile market with over 6 million new subscriber additions every month coupled with the lowest tariffs, Nokia has surpassed its own target almost three years ahead of schedule. This is because Nokia had earlier said that India would become its second largest market by 2010.

“India has quickly become one of the largest markets. I do not think that the demand in the market here will ever come down — the country, which has over 185 million mobile users currently, will double its subscriber base over the next three years. We are confident of addressing the future needs and maintaining our market share,” Mr Kallasvuo said. “Off the 185 million mobile phone users in India, 85 million use Nokia phones,” added the managing director of Nokia’s India unit D Shivkumar.

Mr Kallasvuo also pointed out that Nokia employed 9,000 people in India compared to just 450 in 2004 while adding that both the employee headcount and production at its Chennai plant would be enhanced to meet the growing demands of the Indian market.

Refuting the fact that Nokia was incurring very small margins in India on account of the fact that this was a low-end handsets market, he said: “India is one of the most versatile markets. It is a mix of all — low, mid and high-end handsets — markets.”

Replying to a query on the controversial BSNL tender issue, where NSN had emerged as the second lowest bidder at $167 per line compared to $107 by Ericsson, he said: “We have not received advance purchase order from BSNL, so we can not comment at this moment.” Mr Kallasvuo also refused to comment when asked if the company would match the price BSNL negotiates with Ericsson.

Last month, Nokia had also set up a design studio in India and the company plans to extend this concept to other developing countries to address the demands and challenges posed by the local markets. At the same time, Mr Kallasvuo also added that the Bangalore studio would cater to the demands of other markets on a global scale.

Source : Economic Times
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