Nokia says road to India villages costly for foes

Posted on | June 20, 2007 |

Urpo Karjalainen, head of Nokia’s Asia-Pacific business, tells Reuters that barriers to entry for rivals are high in India.

“In India there are today about 93,000 retail outlets. It’s a huge amount, and our phones are being sold in every single one,” Karjalainen said on the sidelines of an industry event, adding that rivals don’t sell phones in even half those outlets…

Karjalainen said building a presence in India on a similar scale would demand significant spending by competitors.

Nokia is watchful of the organised retail boom in India.

The rise of chains in a country dominated by small retailers would make it easier for rivals to build their presence.

A big retail presence is crucial in Asia, where more than 70 percent of consumers decide which phone to buy at the point of sale, he said. In Europe and the United States, customers often get their cellphone from their carrier.

According to this article, Nokia has a market share of about 50%. I think Reuters is being conservative in estimating Nokia’s Indian market share. Nokia may have a market share upwards of 70% in India. India is Nokia’s third largest market by volume.

Also, Nokia expects 300 million new cellphone users in India by 2010. Thats again a conservative projection. But coming from Nokia it needs to be taken seriously, in spite of government target of 500 million by 2010.

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