“We invested in the country way ahead of schedule,” says D. Shivakumar, managing director (mobile phones), Nokia India. He points out that in 1995, when other MNCs ignored India because of a pathetic 2 per cent telephone penetration, Nokia decided that it had potential. “So, in 2002, when the market took off, we were ready,” he says.

Within four years of the start of the telecom boom, the Rs 2,39,533-crore ($54.15-billion) Nokia has a whopping 60 per cent share of the Indian market. At over Rs 15,800 crore ($3.6 billion), it is by far India’s largest MNC. BW’s Vanita Kohli-Khandekar interviewed Olli-Pekka Kallasvuo, president and CEO, Nokia Corporation, Finland, via e-mail. Excerpts.

Sitting in Helsinki, what does the Indian market look like and how has Nokia’s experience been?
We opened our first office in India in 1995 with very few people. By 2004, we had grown to 591 employees, by 2005 to 1,609, and by the end of last year we had opened a production facility in Chennai and employed a total of 6,494 people. Opening the Chennai facility was a significant milestone for us, because while previously we had software R&D, sales and marketing activities in India, this was the first time we had entered the hardware market. India has a good future in manufacturing, too, thanks to its skilled workforce.

The Indian mobile communications industry grew slowly in the first few years, but we never lost our belief in the market. Our efforts in India have really come to fruition over the past few years, during which time we have seen phenomenal market growth. Towards the end of 2006, there were more than 6 million new mobile subscribers signing up each month —more than the entire population of Finland! Despite this growth, mobile penetration in India is still less than 15 per cent, so Nokia feels privileged that it really is helping to connect people.

Looking ahead, what are the key features or strengths of the market that will work for Nokia?
An important part of our strategy in India is the recognition that the market is not defined by its size alone. Many people see India only as a low-cost phone market, but the reality is very different. It is actually quite a diverse market with all possible consumer segments represented. This is well illustrated by the fact that our high-end Nokia N-series multimedia devices have become very popular, and last year India was, in fact, our fourth largest market for these products. For Nokia, the mobility industry is also about bringing positive change and becoming a part of the society in which we work. In 2006, for example, we commissioned The Mobile Development Report, which analysed the mobile phone usage among urban and rural users. The findings have given us a new understanding of products, protocols and services that could be designed to enhance the lives of users. It has been a great pleasure for Nokia to work with local organisations in India on this.

What markets in your portfolio are comparable to India, not just in size but in texture, and why?
Every market is unique. India does have similarities with high-growth markets such as China and some parts of the Middle East, Africa or Latin America, but it is also very much its own market with its own unique characteristics. In developed economies, mobile telephony started as a complementary service. But in high-growth markets such as India, many people will make their first call on a mobile device and even access the Internet for the first time on a phone.

How has Nokia changed because of India and how has India changed because of Nokia?
Even if Nokia’s roots are in Finnish soil, during the decades that Nokia has become a truly global company it has naturally adopted behaviours from many other countries. Although it is very difficult to put your finger on exactly what these changes are, they had something to do with adapting to the country in which you are operating. Finland is a very small market with a homogenous culture, so historically, we have always had to look abroad and adopt the customs of countries with which we traded. I think this is something that comes through in Nokia’s business culture and in the way we operate in India. We are very happy to make Nokia products here in India, for Indian customers.

What do you think India will mean to Nokia five years from now?
India is currently Nokia’s third largest market in terms of net sales, and we expect that it will soon be our second largest market after China. We continue to see new opportunities in mobility and the Internet. I hope that we, in turn, have contributed significantly to the economic growth of India and the quality of life of its citizens.