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Arguably Finnish mobile handset maker Nokia, the Euro42 billion (2010) multinational company, did as much to usher the telecom revolution in India, as did the Bharti or the Ambani dream.
Despite the vision the Helsinki headquartered company has found itself cornered in the Indian market, its market share visibly reduced and its devices dumped for cheaper, Indian and Chinese counterparts over the past two years.
Now, Nokia has chalked out its fight-back strategy.
The vision to drive this next leg, say company executives, is nothing new but an extension of Nokia's stated purpose -- that of 'Connecting People'.
"The new strategy, as announced by the CEO, looks to 'Connect the Next Billion'. This is an extension of our long standing announced vision of allowing people the right to connect using the latest in technology," says Viral Oza, director, marketing, Nokia India.
According to Oza, the strategy now is to ensure that the product suite that the company has on offer evolves with the evolution of technology and is made available at a lower price band -- that is, at the sub-Rs 6,000 segment as well.
The next billion, he says, will come not just from the pipe connect that a handset provides, but from providing the user with the ecosystem to connect using data, and this data usage will not be confined to those carrying costly handsets.
"The basic premise of mobile technology has to be to make it available to everyone.
"This has been the mainstay of the Nokia brand, which has traditionally had a presence from the Rs 2,000 to the Rs 20,000 range.
"The change one will see now is the need of the future," Oza explained.
The idea itself has roots in Nokia global CEO Steven Elop's words: "The battle of devices has now become a war of ecosystems."
That Nokia had to work toward the development of a favourable ecosystem is not a new premise in the larger Nokia strategy.
Conventionally, the term ecosystem was used to refer to a group of partners that Nokia would bundle with in the creation of the device.
These would include the contributions from silicon providers, software component developers, integrators and operators besides Nokia, the majority partner.
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In the new scheme of things, this ecosystem also refers to telecom service providers like Bharti Airtel and Vodafone.
In other words, the idea has now been expanded to include third party software and services, while the underlining philosophy of building around the device remains intact.
"The idea of access is linked to affordability.
"So we have tied up with service providers like Airtel where we will provide free internet surfing for the first six months on the purchase of a handset," Oza said, detailing the new strategy.
The direction in which the market is moving is unmistakable. According to a recently released report by the Federation of Indian Chambers of Commerce and Industry and Ernst & Young, in 2010, handset volumes in India reached 150 million.
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"Things we are able to add on top, free data plan, apps that are localised, business models that work for the country will aid sales.
"So for most phones, Nokia allows free downloads from its music catalogue consisting of 6 million songs.
"The differentiation has to come at every price point not, just at the high end," explains Gandhi.
"The winners will be ones who are able to innovate largely in the sub-Rs 6,000 category. This is aided by two factors: First, the size of the market, which is huge, and second, by the challenge, which is to pack in more and more features at the restricted price point, and then adding more layers of services," Gandhi adds.
The sub-Rs 6,000 segment, according to Gandhi, is growing at 5-6 per cent per annum, and the big push here is expected to come from smaller cities and non-urban areas.
Gandhi's optimism is understandable given that at present, 72 per cent of the Indian population lives in rural areas, and that in 2010, 65 per cent of the overall handset sales came from semi-urban and rural markets.
Then, as Oza points out, the country has a burgeoning young population, 'eager to get online'.
"The consumer has become experimental. It does not matter at what price the phone comes, the buyer expects the same features at Rs 6,000 that he would get at Rs 20,000.
It therefore becomes essential that the company is able to address this challenge to ensure growth," Oza says.
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"The past success and the Nokia brand will help us make a success of these partnerships. If one looks at the local players, the market is fragmented and therefore it is not clear which brand is which.
"There is no long-term commitment and bonding with the brand, which they will have to build, and which we have already built, making this our advantage," Gandhi says.
Analysts tend to agree. According to Kumar of IDC, Nokia, in spite of competition, will continue to retain its top spot in both the feature and smartphone categories.
Interestingly, even as Nokia is gearing up to enter the lower end of the price band, local players like Lava, Spice and Karbonn, which have so far determined the growth of the mass market, are looking to increase their average price points, signaling the need for consolidation in the market.
From an average of Rs 2,500, these manufacturers are looking to take the average price point to Rs 4,000.
"Most local players are already well established.
"The rankings of the top seven to eight players will remain the same.
"It is right below this segment that one will see some sort of consolidation, even elimination of some of the players," says Singhal of E&Y.
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