Working on new cost-control concept

Our Bureau

Hyderabad, Nov. 8

Finnish telecom major Nokia has sighted a largely untapped market in India and believes that there is immense scope for growth as the mobile phone penetration increases across segments.

It is in the process of evaluating a new model for public service and is in parleys with some of the leading telecom operators in India and micro finance institutions for local lending option.

Aim is to reach out to larger base through a different model from the Bangladesh's Grameen Bank model.

Interesting market

The Head of Strategic Marketing, New Growth Markets and Networks, Ms Anne Larilahti, said India is an interesting market in terms of education, skilled professionals and a vast low-income population. But this is both a challenge and an opportunity.

Study

Citing a London Business School study, she said mobile penetration of 10 for every 100 population could increase the GDP by 0.6 per cent. And another report by McKinsey indicates that this could go up by about four to six per cent as this throws up new breed of entrepreneurs offering services.

Over the next few years, of the half-a-billion additional new phones, it is projected that about 80 per cent would be from emerging markets, and China and India would account for a big chunk of this market. Though the Chinese market is much larger, India would be able to grow much faster.

From Nokia's perspective, the strategy is two-pronged offering high-end handsets for convergence users and for others who want a robust basic feature phone.

"We are not chasing cheap handsets but believe in reliability. In order to cater to the low-end market and those who cannot access mobile phones, we are working on a new concept such as the Grameen model. But this will be different. A phone will be installed for use in a local area and people can access it paying for the services," she said.

The revenue model for Nokia Cost Control Concept is being worked out with operators. Nokia currently accounts for about 36 per cent of global market share and has over 2.5 billion phones and aims to reach 3 billion by 2008.

(This article was published in the Business Line print edition dated November 9, 2006)
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