Nokia’s Strategy in India (Page 2)

Abstract

The case presents an overview of Nokia’s entry and expansion strategies in India. In the past one decade, Nokia has emerged as one of the most recognized brands in India, surpassing some of the Indian business conglomerates in terms of revenues. The case describes the marketing strategies of Nokia in India and examines how the Nokia brand has become synonymous to mobile phones in the country. While Nokia considers India as one of the most important markets for its future growth, the company has been facing stiff competition in the recent years from Korean players like Samsung and LG. The case highlights Nokia’s strategies to compete with Korean companies and its product expansion plans in the near future.

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In 2005, Nokia was recognized as the 'Brand of the Year' by the Confederation of Indian Industry, India's apex industry association. The company was chosen for this award because of its high brand recall, well established distribution channels and being 'most preferred' by the consumers.

Enamored of Nokia's success in the Indian market, Harvard University had invited Nokia India to talk on 'How Nokia cracked open the Indian market?'

THE INDIAN MOBILE PHONES INDUSTRY

The mobile phones industry made a slow start in India in 1995. Several private players who had entered the industry in 1995 exited in the next few years due to the unfriendly telecom policies of the Indian government, high licensing fees and absence of a proper telecom regulatory body. The growth in the subscriber base of mobile phones remained sluggish initially, reaching the 1 million milestone in 1998.

In 1999, the Government of India announced a new telecom policy. This policy planned to provide telephones on demand by 2002. Among other things, the policy allowed unrestricted private entry into almost all mobile service sectors. The government allowed cellular mobile service providers to share infrastructure with other operators. It also allowed existing operators to migrate from fixed license fee to one-time entry fee with revenue sharing. This policy helped many private operators to break even faster.

By 2001, the demand for mobile services was growing well. The private companies concentrated on providing basic telephone services to consumers. The number of mobile phones crossed five million by 2001 and doubled to 10 million in 2002. As mobile phones became popular, there was an increasing demand for better services and lower prices. This led mobile network operators to innovate and come out with better products and services. In 2002, incoming calls on mobiles were made free, and this fueled the growth of the industry.

In the early 2000s, India had two major types of mobile services operators - one running on the GSM network and other on CDMA. Introduced in 1995, the key features of GSM network services were nationwide roaming for prepaid and postpaid subscribers, along with roaming services for Europe and the US. The growth in this segment was encouraged by declining call tariffs and low entry barriers (Refer Table I for details of GSM tariffs in India). .....

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THE INDIAN MOBILE PHONES INDUSTRY

TABLE I : GSM TARIFFS IN INDIA

TABLE II : MOBILE GSM OPERATORS' SUBSCRIBER BASE (2004)

TABLE III : CDMA OPERATOR SUBSCRIBER BASE (2004)

TABLE IV : MAJOR MOBILE PHONE NETWORK OPERATORS IN INDIA

ABOUT NOKIA

TABLE V : GLOBAL MARKET SHARE OF LEADING MOBILE PHONES MANUFACTURERS (2004)

NOKIA IN INDIA

TABLE VI : MARKET SHARE OF MOBILE HANDSET MANUNFACTURERS IN INDIA (2004)

TABLE VII : INDIAN GSM MOBILE HANDSET MARKET (MAY 2004)

THE PROBLEMS

BOUNCING BACK

TABLE VIII : GSM SEGMENT

TABLE IX : NOKIA - TEN MAJOR MARKET NET SALES

THE FUTURE PROSPECTS

TABLE X : EXPECTED SCENARIO OF MOBILE SUBSCRIBERS

EXHIBIT I : NOKIA'S PRODUCT RANGE IN INDIA

EXHIBIT II : ADVERTISEMENT CAMPAIGN FOR NOKIA INDIA

ADDITIONAL READINGS OR REFERENCES

        Case Code   BSTR174
   Case Length    19 Pages
              Period    1998-2005
Organization     Nokia India
        Pub Date     2005
Teaching Note    Not Available
     Countries    India
      Industry    Telecom

Issues

• Entry and expansion strategies of Nokia in India.

• Marketing mix of Nokia to tap the Indian market.

• Challenges faced by Nokia in the Indian market

Keywords

Nokia India ,Indian Mobile Phones Industry, CDMA, GSM, Marketing Strategy, Marketing Mix, Customization, Branding, Nokia Priority Dealer, Nokia Professional Centers, Rural Marketing, International Business

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