Nokia is the undisputed market leader in the highly competitive mobile phones marketplace in India. Globally while the sales of mobile phones have seen a downturn, thanks to the recession, it was largely thought India would not be affected. However, the Indian Cellular Association's (ICA) recently released figures point to the fact that Cellular companies in India saw a sales dip of over 70% in July compared to June.
The revelation came from one other than Nokia India's head of marketing, Vineet Taneja, at a recent phone launch ceremony in Mumbai. Techtree got a chance to catch up with Taneja during the launch of two new Series 40 handsets, the 6700 Classic and 6303 Classic. While it was not a lengthy discussion, the brief interview with Taneja helped us gain some insightful inputs on Nokia's future plans for India as well as its stand on the current VAT rates imposed by Maharashtra - which he termed as a "regressive" approach.
On Maharashtra Governments Decision to Increase VAT: The Maharashtra State Government in its budget last month announced an increase in VAT from 4 per cent IT floor rate to 12.5 per cent RNR residual rate. This move was termed "regressive" by Taneja who opines that the ultimate aim of the Government to increase revenue will actually work the other way round and cause the state government to lose money if this VAT regime continues for the next few years.
The move, which makes mobile phones in Maharashtra dearer to buy than other places in the country, will almost certainly lead to a dip in the overall sales. In fact, quoting figures from the ICA, Taneja has informed that companies in India have already reported a 70% dip in sales compared to June. He has also termed the new VAT rates unfair, because users would be better off buying handsets from other states rather than from Maharashtra, again affecting the state governments' coffers. He added that this move could also cause a rise in the sales of grey market handsets thus causing a national security issue as no one tracks the sales of goods and handsets through these channels.
On Nokia's Roadmap for India: Nokia sees India as an important hot spot for its future expansion plans. While India is still a low-price, high volume segment, the sheer size of the market means there are enough takers for Nokia's higher end devices as well. When asked about future phone launches in the country, Taneja without going into the details confirmed that India will be getting more handsets in the future and that there will not be much of a lag or time delay between the launch of a new device internationally and its subsequent arrival in India, as we have been used to in the past.
Nokia also sees itself getting more into being a service provider, rather than just remain a hardware manufacturer. Examples of the company moving to the services domain include the launch of the Ovi Store and the Music Store in India. The company is also seeing operator tie-ups and other such collaborations to be that much more accessible to the public. Even for the low-end segment, Nokia had tied up with Reuters to provide its own "Nokia Life Tools" service for the rural market in the country.
On the Chinese Phone Threat While welcoming competition, Taneja has expressed his concerns over the rampant proliferation of "unsafe" Chinese handsets in the country. While reiterating that consumers should get the best deal, he added that Chinese phones are hardly a good deal for the consumers in the long run. Quality issues and uncertified, unsafe components can at times cause more harm than good. He has also expressed concerns over the security of such handsets, an issue Techtree had raked up months ago. He has called for a law that bans the sales of such handsets to ensure that only quality handsets make it to the Indian consumer.