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Nokia CEO: focus on needs

Telcos and mobile companies must address the needs of emerging and diversified global markets with more than just low cost handsets, a key industry figure warned this month.

Telcos and mobile companies must address the needs of emerging and diversified global markets with more than just low cost handsets, a key industry figure warned this month.

At the CTIA (Cellular Telecommunication and Internet Association) Wireless 2006 conference in Las Vegas, US, Nokia’s out-going chairman and CEO Jorma Ollila urged operators and vendors to be more sensitive and responsive to underdeveloped markets, not just in terms of pricing, but also with attractive services and relevant delivery of new technologies.

Insisting that 80% of the next billion wireless subscribers and mobile users will come from countries such as Russia, China, Brazil, and Afghanistan, Ollila told delegates that they need to address the needs of low-income and developing markets by providing affordable phones and services that customers actually want in order to achieve continued growth.

“Markets differ greatly from region to region around the world,” proclaimed Ollila, pointing out that in less developed markets mobile phones are often many people’s first telecommunications experience. Cost alone, however, won’t be the only deciding factor for populations in these countries, warned Olalla, dubbed ‘Mr Wireless’ by CTIA president Steve Largent ahead of his keynote speech.

“A mobile phone is an aspirational choice — something that expresses and enhances their lifestyle. A lot of success for companies will depend on customer loyalty from that first phone. This is something we at Nokia don’t take lightly,” Ollila went on to add.

Ollila’s comments can be seen as a competitive barb aimed at Motorola, which currently provides low-cost (less than US$40) handsets to poor countries at a rate of 31,000 phones a day.

Motorola’s CEO Ed Zander recently issued a call for developing nations to lift telecom regulatory barriers in order to ‘connect the unconnected’, and no doubt open up new lucrative revenue streams for vendors (see IT Weekly 26 February – 4 March, 2006).

Last year, 2.2 billion people were using mobile phones and that number is expected to reach three billion in 2008.
In his speech at CTIA, Ollila also played down much of the hype surrounding TV and music downloads on mobile phones, by stressing that ultimately the mobile market will always be dominated by voice communication.

“Mobile voice is still the killer application,” he said. “Subscr- iber growth is still fuelled by voice, and voice will be the most valuable form of communication for a long time still. There is still much work to do to improve voice connections and handsets,” he added.

Talking about the issues Nokia wants to help tackle as one of the world’s largest handset suppliers, Ollila said that service providers must complement handsets with relevant content at realistic pricing, ‘even at different times of the day, because these emerging markets are growing’.

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