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India's mobile user base is expanding rapidly. Come 2010, the number of mobile users will be
somewhere around 500 million. And much of this growth will come right from the heart of India,
the rural India that is still untouched by the mobile revolution. People who could utilize the
power of mobile phones to boost their agricultural output, to get better prices for their produce,
and to add more zing to their lives. No one knows this better than the biggest mobile maker in
the world - the mighty Nokia. The company that's °

°
  around the globe.

The cell phone sales may be falling in many parts of the world due to recession but the story is
different in India. Here, whopping 10 million new mobile connections are being added every
month. The rural India only has about 13% penetration so far so the real growth potential lies in
the rural belt.

In mid2009, Finland-based telecom giant, Nokia Corporation (Nokia) launched its Nokia Life
Tools (NLT) service in the state of Maharashtra in India. Analysts viewed it as the company's bid
to expand its rural base in the country. Targeted at the rural consumers, the NLT service offered
a range of services in the areas of agriculture, education, and entertainment. In doing so, Nokia
not only tapped the growing potential offered by the rural population but also sought to address
the information gaps in the rural community.

Nokia began its focus on the rural markets in India in 2003 when it launched a mobile handset
with features such as longer battery life, one-touch flashlight, etc., that catered to the needs of the
rural consumers.

Over the years, it extended its support to the rural markets by launching several low-end phones
that rural consumers found affordable. Taking its rural thrust forward, Nokia planned to offer
value added services (VAS) through its mobile handsets to the rural consumers. Subsequently, in
November 2008, the company launched a pilot program for testing its NLT service in
Maharashtra. The results of the test phase showed that farmers and students, in particular, had
benefited through this service. The farmers could access the latest information on crops, weather,
market prices of seeds, fertilizers, and pesticides, etc. The students benefited by learning the
English language and gaining local, national, and international general knowledge.

Nokia planned to roll out the NLT service in more states of India and also in other emerging
markets.




 

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Nokia began focusing on the Indian rural market in 2003 when it launched a mobile handset with
features such as longer battery life, one-touch flashlight, etc., that catered to the needs of the
rural consumers. Over the years, it extended its support to the rural markets by launching several
low-end phones that rural consumers found affordable.

However, the company felt the need to serve the rural market by offering a value proposition
along with its handsets. It noted that the rural consumers, especially farmers and students, had
little or no access to the information they needed due to lack of resources and erratic Internet
connections.

This prompted Nokia to launch a service that would be embedded in its handsets and would
serve the needs of the rural community. In November 2008, the company launched a pilot
program for testing its NLT service in Maharashtra. The test phase was carried out for a period
of four months and the results, revealed in April 2009, showed that farmers and students, in
particular, had benefited through this service.

The farmers could access the latest information on crops, weather, market prices of seeds,
fertilizers, and pesticides, etc. through this service. The students benefited by learning the
English language and gaining local, national, and international general knowledge.

Having received the feedback, Nokia commercially rolled out the NLT service in 10 districts in
Maharashtra, in June 2009.


)  

Nokia had always been at the forefront in coming out with products that would cater to the needs
of the Indian consumers. While it focused on launching products for the urban market, it also
focused on serving the rural population. In 2002, Nokia announced its emerging market strategy
under which it planned to lower the initial costs of owning a mobile phone in addition to
lowering the operating costs.|

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. . 
Taking its rural thrust forward, Nokia planned to offer VAS through its mobile handsets to the
rural consumers. The company felt that adding content that would benefit the rural consumers
while offering the mobile handset at an affordable price would help it further tap the rural
market.

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Buoyed by the success of the NLT pilot program, Nokia launched the service commercially in
Maharashtra, on June 12, 2009. The company signed a Memorandum of Understanding (MOU)
with the Maharashtra State Agriculture Marketing Board (MSAMB).

That's not all. Nokia also announced micro-financing scheme which will be made available to
women first. The objective of micro-financing is to make Nokia phones more affordable for rural
masses. The micro-financing scheme will be launched in 12 states initially. The scheme was
tested in two states on a pilot basis. It allows people to make small payments for as low as rupees
100 per week for about 25 weeks. The scheme virtually removes the cell phone affordability
barrier.

Nokia President and CEO, Mr. Olli-Pekka Kallasvuo, said that the company will also be looking
to offer local content in entertainment and gaming. Does that mean we'll get c
  

loaded with folk music and games around folklore? Let's wait and watch. But the idea definitely
sounds very interesting.

.    


Nokia had earlier launched a basic handset with a torch (large parts of rural India don't have
electricity and power cuts are commonplace even in the cities) -- having a torch built into a
mobile phone is a distinct and tangible benefit. The Nokia 1100, the first made-for-India phone,
has been a runaway success. Manufactured at Chennai, it is also being exported. The 1100
incorporates a torch, an alarm clock and a radio. "Innovation is something which consumers
reward in this market".

For reasons of affordability, in rural areas a phone may be shared by several people. The models
being launched to cater to this need will have separate address books, individual billings and
more. People initially doubted the torch phone, too, but it became a popular product.

Product Promotion« Advertising: Through TV, Sign boards, Bill boards, Radio, Newspaper,
Broachers, Posters, Dummies and display stands

Experts lauded Nokia for launching VAS (which, till then, had been mostly offered to the young
urban customers) through its mobile phone for the rural people. According to Naresh Priyadarshi
(Priyadarshi), head of Synovate Business Consulting India , "VAS will definitely be the driving
factor, but what is important is the end-offering customized to appeal to the target segment. It is
very important to understand the needs of the rural population to ensure that the services are
aligned on those lines. Vernacular content is already a differentiating factor, considering the wide
language diversity in the rural population which a lot of handset manufacturers are already
exploiting."

In December 2008, it went one step further with the launch of Nokia Life Tools. "Nokia Life
Tools is a range of agriculture, education and entertainment services designed especially for the
consumers in small towns and rural areas of emerging markets," says the company. "Aimed at
providing timely and relevant information customized to the user's location and personal
preferences directly on their mobile devices, Nokia Life Tools is the first step towards bridging
the digital divide."

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In rural India -- which constitutes 70% of the population -- affordability is an issue. So there is a
different range for this constituency.

Nokia started distributing its phones through a partnership with HCL (formerly Hindustan
Computers Ltd.), which had already built an extensive network for its own products. Recently,
Nokia has decided to supplement that with its own distribution efforts. Both companies realized
that there was a tremendous growth opportunity and it was best that we utilized the resources of
both organizations in an optimum manner.

Nokia has opened its retail outlet µNokia Priority¶ as well as many authorized dealers at various
places. Consumer Manufacturer Dealer

Promotion Mix AIDA in Nokia ± : A ± Attention : attract the attention of the customer. I ±
Interest : raise customer interest by demonstrating features, advantages, and benefits. D ± Desire :
convince customers that they want and desire the product or service and that it will satisfy their
needs. A ± Action : lead customers towards taking action and/or purchasing.

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 ,| |

Supply Chain Management Channels: Nokia > Distributer >> Whole seller >>> Retailer >>>>
Customer

Discounts are provided to online Nokia purchasers through Nokia discount coupons or coupon
codes Commission is also provided to retailers on the sale of every Nokia cell phones and
accessories.

 


One of the biggest challenges that Nokia faced with its NLT service was in offering timely and
accurate information to the subscribers, according to experts. Some experts also felt that the
growth of this service would be limited since it was offered only in some areas such as
agriculture, education, and entertainment.

 -

As of 2009, Nokia was the dominant player in the Indian mobile phone market. Experts felt that
its product innovations coupled with its ability to appeal to various segments of consumers were
the reasons for its success..

A rural push offers Nokia   , 



 
 ,

 
 

    , feature-by-feature. Of course,
rural markets do not operate in complete isolation to urban centres, but it will take time to plateu.
In order to drive this growth, Nokia will have to push consumer adoption by educating users and
a significant distribution and service push.