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June 19, 1997


A cell sale tale

Shariq Siddiqui in Bombay

There's been a miracle in India's fledgling mobile phone market. Nokia, the international telecom giant, has managed to sell hundreds of its model 9000 cellular handsets.

And if you are still wondering what the flutter is all about, you obviously have not heard of what Nokia 9000 Communicator really is. And what it is priced at.

Nokia 9000 is not just another fancy car phone. Built into it are a graphical Internet browser, email client, fax and data transmitter, a short messaging system and a personal organiser, all designed to fit into a pocket. Physically, that is. It costs nothing less than Rs 110,000.

In India, a cellular handset typically costs between Rs 9,000 and Rs 20,000. Now the only incentive for buying a handset costing five times more would be its extra Internet features. But in India there are only 40,000 Internet connections, most of which are shell accounts or text-only services and that too on painfully slow dial-up lines. Email traffic is negligible and data transmission unheard of.

It was against this backdrop that Nokia executives, during the India launch of the 9000 model in December 1996 consented that they did not really expect to sell too many. The launch was more to capture a mindshare and showcase Nokia's position as an innovator and a state-of-the-art technology provider.

When Rediff On The Net got in touch with Nokia Mobile Phones India Business Manager Pierre Middleton to see how they were doing, he said, "We would love to say (that we have sold) tens of thousands (of Nokia 9000s in India) but we have managed to sell a few hundreds."

Nevertheless, that must have been a pleasant surprise, for only six months ago Nokia was hardly expecting any sales.

Middleton said, "Though the sales are modest compared to the European markets it is an encouraging sign from a market where cellular phone technology is just establishing itself. It is also a comment on the growing awareness of the Internet in India."

"The Nokia 9000 is undoubtedly a niche product in India. It never was intended to have generated volumes. It was to only be a showcase product to reinforce Nokia's image as a technology innovator. Even in European markets Nokia 9000 remains a high-end product."

But it's a bit more affordable in Europe. Nokia 9000 is available for £600 (about Rs 35,000), less than a third of the cost in India. "But the pricing depends on market conditions," defends Middleton. "In India, up to 60 per cent of the price of the product is made up of duties and taxes. As yet, Nokia 9000 is not manufactured in India."

Also, in European markets, Nokia 9000 has to compete with GSM phone operators who often offer handsets free. "In a developing market like India," says Middleton, "it will be some time before mobile service providers focus their attention on handsets. Right now, operators are concentrating on extending the reach of mobile phone services."

Most Nokia 9000 handsets have been sold in the metros of Bombay, Delhi, Madras and Calcutta. The software capital of Bangalore has also managed some sales.

Obviously, the sales are limited to cities with Internet gateways. Middleton expects a wider base in the future as Internet and cellular service footprints spread into the hinterland. Already, cellular service providers are required, by law, to maintain 40 per cent rural coverage.

The USP of Nokia is that it allows fax and data communication without any add-ons. The same is possible with a laptop computer and a mobile phone with a data card or special computer software, both of which are part of Nokia's product line-up. But with a Nokia 9000, there's a lot less to lug around, he points out.

It will be a little while before people start looking at mobile phones for data transmission in India, agrees Middleton. "The industry is still young in India. Both consumers and operators will concentrate on voice communication before data communication comes of age."

Nokia is going to introduce several "exciting" new products in the Indian markets in the coming year, Middleton is enthusiastic.

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