| Nokia Networks president Sari Baldauf in New Delhi on Thursday. (PTI)
New Delhi, Aug. 28: Nokia today unveiled its plans to offer shelter-less, pre-fabricated, pre-assembled base stations for cellular mobile service providers that is expected to bring down the cost of owning a mobile service to the end customer by 15-20 per cent.
The company also unveiled two new entry-level handsets — Nokia 1100 and Nokia 2300 — to capture a huge market share in rural and urban markets. The products will be available in India by March next year.
The new base station, the Nokia executives claim, can bring in profits to the operators even at low average revenue per user of $5. The company is bullish about the market in India for its mobile phones and infrastructure product.
“India is a prime example of growth potential, with mobile phone penetration rate being less than 2 per cent of over one billion population,” said Sari Baldauf, president of Nokia Networks.
“India's size and diversity make it an especially interesting market for mobile communications. While meeting the needs of advanced users of mobile services, we also need to look at the segments that have lower ARPU. These segments provide a great potential for operators and play a crucial role in increasing the global mobile subscriptions from one billion to two billion,” said Baldauf.
She claimed that their solution is designed to capture the low ARPU markets. Their end-to-end solutions will allow operators to build a profitable business and save around 50 per cent on their traditional network-related costs.
“The operators can offer the right mix of affordable terminals and services to their consumers with the help of these new products,” said Baldauf.
However, cellular operators in India do not agree. “There are many costs that are to be taken into account. Currently, the ARPU is $20-25 for post-paid and $8-10 for pre-paid cards. Even at those ARPU levels, the cellular operators are making losses. Once the volumes increase and the subscribers use more airtime we may see a drop in ARPU,” said an industry observer.
Similar views were expressed by Smart Communications Inc, the leading cellular operator in the Philippines where Nokia has set up its first batch of shelter-less, pre-fabricated, pre-assembled base stations.
“The $5 ARPU is ambitious. We will keep it at $10 perhaps,” said Don J Rae, chief operating officer of Smart Communications.
Nokia claims to have 55 per cent brand preference in India and plans to expand its reach in rural areas of large markets like India, Russia and China. It has also set up software development centres in Bangalore and Hyderabad.