Fresh from his elevation as the regional head for Nokia handling West Asia, Africa and India, a grouping of 90 countries, Nokia's Managing Director, India, D. Shivakumar, is in Chennai to attend a sparkling conversation between ace commentator Harsha Bhogle and former England cricket captain Nasser Hussain. Organised as part of a quarterly series, Nokia Conversations brings together people from different walks of life for freewheeling chats with a corporate audience. (Read Hussain's Straight Bat to Bhogle's Googlies, Business Line, October 5). In this interview, Shivakumar talks about his new role, about Nokia's reassertion in the market, where it has seen its share falling rapidly, especially in the high-end smartphone business, and how he expects the launch of Nokia's Windows phone as well as its recent launches of dual SIM phones and touch-and-type phones to transform the company. And, also about Nokia's enduring relationship with King Khan and Priyanka Chopra, the brand ambassadors. Excerpts:
How has Nokia's structure changed and what will your new role be?
Nokia globally has split the globe into four regions, from the earlier eight: the Americas are one, Europe another, Asia-Pacific is another, and India (Nokia's second largest market after China), West Asia and Africa are one region. The idea is for the regional organisation to take much of the strategic role and direction, so the empowerment is at a higher level.
Apart from India which are the stronger markets in the regions you will be handling?
All of it! Nokia is a market leader in all these markets. In Africa, whether it's Egypt or South Africa, West Asia, Saudi Arabia, the whole tract, all are fast-growing markets. The penetration opportunity in Africa is still there, so Africa will drive the next wave of growth.
If you look at these markets, it has close to three billion people, it's kind of a disparate market, you have the richest hotels and the poorest hutments, you have very rich and very poor people, you have the best malls and luxury outlets and the functional mom-and-pop store. It's a bipolar region, what will be required is a great sense of balance and recognition of what role the brand and mobility will play. The fact is that mobility can transform lives. When we, four years ago, had a media offsite we said we wanted to connect 90 million to 900 million in India, most people didn't believe us. Today, 860 million people have (access to) some connections, 550 million a standalone connection. I believe mobility will grow exponentially in markets which are media- and mobile-dark.
With your recent launches and the coming launch of the Windows phone, will Nokia get back the share it lost?
If you go back to our February 11 announcement (when Nokia announced its Windows phone), when we made it, a lot of people felt it was a defensive move by Nokia. But, look at it, eight months later, that move has been the most disruptive of the telecom sector, it has forced companies to buy others, Google bought Motorola, it has forced people to rethink their operating systems and also forced people who have done nothing to realise they have fallen by the wayside. It's been the most disruptive.
The fundamental point of that move was the primary OS of the smart device would be Nokia with Windows. That phone should come one year from our February 11 announcement … that will position the whole Nokia and Windows experience in a very different league… all the work we have done with consumers has been positive. It is a big move by Nokia to challenge all the other brands.
Did Nokia take its eyes off the market when competitors came in, especially the Chinese brands?
It's a fair question. If you go back to mid-2009, we had 14 operators and each of them started cutting each other on tariffs, tariff plans went to 1 paise a second and so on, so consumers started buying four or five SIM cards, and hence there was a flood of low-quality, low-price, low-value, branded, unbranded dual SIM products on the market. No operator wants a dual SIM phone. There was some degree of discussion and debate within Nokia before we launched our product, but ever since we launched, we have been on track, met our strategic objectives – moreover, when Nokia does something … I have always said this market is about brands, scale and innovation, even in Nokia dual SIM, we have innovated. Most dual SIMs have to be put below the battery, in this, one SIM is below the battery, one SIM is to the side, so you can shuffle it, so you have a primary number and the other one which you have, because of tariff plans, you can shuffle it. It's a very simple innovation but a very relevant innovation for the multi-SIM consumer.
The other simple innovation we brought in is a key which you just press and it goes from one SIM to another. Nobody else has it. Another innovation is that we recognise that people have up to five SIM cards, so for each SIM, you can have a different ring tone and then you'll know who's calling. No rocket science, but tuned to what the consumer wants.
Even in a market which one thought has no innovation capacity left, Nokia brought these innovations.
Are these moves by Nokia now resonating in the market place? You also launched a touch-and-key phone, is that doing well for you?
We had innovation in dual SIM, in touch-and-type, only we have that, nobody does, and in the top end, we just introduced NFC (near field communication), we are trying something new with Shah Rukh's Ra.One. With an NFC phone, you tap the NFC tag, and you can download songs, wallpaper, etc of Ra.One. Nobody has ever tried this in any part of the world on this scale; more than 400 retail points are there where we have coined an expression ‘Just tap' and download and go, it's a huge promo for Shah Rukh, the movie Ra.One and for us. But, the point is, if things like this can work, it can change the monetisation model. For example, traditional industries such as music, which has always been hostage to piracy, you can distribute it like this in the future. Just imagine, you don't have to make CDs and DVDs and be worried that somebody is going to plagiarise it, you can just release it in this format. In any which way NFC will be a game-changer as more devices and content comes in and as more people adopt it.
Is NFC a fairly new technology?
Fairly new; it started in 2002, 2004 the NFC forum was formed. Nokia, Sony and Philips were the original people behind it, there are 150 members now and there are clear standards on what will be on the phone and what won't. In a sense it's a pretty new technology coming to India. The traditional uses of this technology have been mobile payments, identification and so on. What we are trying to do differently is to see if we can give a slice of entertainment along with it.
Nokia has been deeply associated with cricket and you've also been taking your association with Shah Rukh forward?
When we started looking at IPL we didn't want to be sponsors of the IPL tournament because we felt that the Nokia brand had enough awareness. But, an IPL team like KKR had appeal as you have traditional opponents playing together, Sourav Ganguly and Shoiab Akhtar or an Ishant Sharma and a Ricky Ponting on the same team. To the average cricketer it is unthinkable so we had a great campaign on that. Unfortunately in the first edition KKR didn't do well, In the second edition we did the ‘Everybody is a winner campaign', and a consumer promo around it, next edition, we had ‘Main bhi coach' and this year, we said ‘Don't take any tension, just go and play your own game'. And if you look at the team (KKR), it's come a long way.
The title sponsor of the T20 championships was coming up. I've always said it's not enough to take a title sponsorship, many companies make the mistake of thinking a mere title sponsorship will see them through. It's what you do around it which is important. For example, Nokia Conversations. When you get Harsha Bhogle and Nasser Hussain with the elite businessmen of Chennai as audience, that's how you build a larger return for your investment. You have to have the ideas around it to say how can I magnify it, how can I blow it up?
What about your association with SRK? It has taken off from your relationship with KKR?
Shah Rukh is the first brand ambassador for Nokia. Nokia has never used brand ambassadors, so SRK is unique. After SRK, we signed Priyanka Chopra and both of them have done a great job for the brand.
When he decided to buy a team, KKR, we said we are with you. We invested in KKR and its assets. This has paid off in a big way and the association is strong. The Priyanka Chopra ads, even the latest Champions League ad, is a clutter-breaker. She's always been a great advocate of technology and Nokia. Shah Rukh has made a breakthrough movie, Ra.One, and we are trying to see how we can integrate this from a technology and retail presence and thus play in the entertainment space.
Will you say that a year down the line Nokia will be a very different company from what it is?
It already is. Not just in India but globally also. Nokia dual SIM phones are on strategy and objective, touch-and-type phones are a form factor innovation, and once the Windows phone is launched, you will have a very different Nokia. It should change our position in the market (perception).
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