The Hindu : Business : Nokia stresses adequate spectrum allocation

Online edition of India's National Newspaper
Wednesday, Sep 14, 2005

Business

Business

Nokia stresses adequate spectrum allocation

R. Gopalakrishnan

Scope for `volume and value' opportunity in Indian markets

HELSINKI: India is one of the "most open and competitive markets'' for cellular telephony in the world and there are few regulatory problems relating to this sector, according senior officials of Nokia Corp, one of the world leaders in cellular equipment manufacture and managed services in mobile communication.

Talking to a group of visiting journalists from the Asia-Pacific region here last week, the officials, however, pointed out that allocation of spectrum for broadband including GSM (global system for mobile communication) and CDMA (code division multiple access) operators was yet to be resolved.

The policy (still being finalised by the government) should ensure a minimum level of adequacy, considering especially that there were multiple players in various circles.

Five mega hertz of spectrum was hardly sufficient and a multiple of that, like 15Mhz would be necessary, company officials said.

Facility in Chennai

Nokia, which has been expanding its presence in various market segments and services in India for the past decade, has already announced its decision to set up a manufacturing facility near Chennai for handsets and base station controllers and a global network operations centre, whose location has not yet been announced.

Given the fact that slashing of import duty on cellular handsets was one of the major factors behind the explosive growth of the cellular market in India, would Nokia be interested in getting some tariff protection once it becomes a manufacturer within this country?

Impact on GDP

A senior official, responding to this query, said the prevailing environment in India had obviously been taken into account while making the investment decision, adding, however, that this matter was strictly not within his own functional jurisdiction.

Nokia officials denied that it was unrealistic to expect cellular telephony to serve large rural areas that had not been furnished with adequate landline infrastructure.

They said cellular telephony had a much higher (positive) impact on the gross domestic product (GDP) growth compared to landlines.

Hence, even if higher investment in cellular infrastructure would be required in areas totally unserved hitherto by telecommunications, the returns on such investment would be higher than in the case of landline infrastructure.

Nokia was convinced that it was "misleading'' to call India a "cheap'' (low end) market. India provided both "volume and value opportunity'' to cellular service providers and equipment manufacturers, given the aspirational value to which the Indian consumer responded.

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