Nokia Sees Sales Growth in India Despite Drought

Nokia, the world's top cellphone maker, does not expect a drought to hit its sales in India, its second-biggest market, and will expand a rural micro-finance offer for buying handsets.

Chief Executive Olli-Pekka Kallasvuo said sales of Nokia's high-end smartphones
were also growing in India, the world's second-largest mobile market with around 430 million users and where nearly 60 percent of mobiles are Nokia phones
. Nokia is betting on markets such as India, where more than 10 million mobile connections are being added every month, at a time when global cellphone sales are falling as recession-hit consumers in emerging and developed markets rein in spending. Poor monsoon rains have pushed India to the brink of drought, which could crimp consumer incomes and spending particularly in rural areas where much of the industry's growth is coming from. Nokia executives however saw little impact on sales, saying people could use phones more as they cut spending on travel. "We don't think the market will slow down for mobility in rural India," D. Sivakumar, managing director of Nokia's Indian unit said. Nokia recently piloted a scheme in two states where it sold handsets on a weekly installment of 100 rupees ($2) over 25 weeks.

On Wednesday, the company said it would rollout the microfinance offer in 12 Indian states. Kallasvuo said India would remain one of Nokia's top growth markets, as 81 percent of the country's mobile users were in urban areas and they were driving demand for high-end phones. "India is very often perceived to be a low-end market. That is not the case," he said, adding Nokia's high-end phone models such as N97 and N86 were selling nicely in the country. In May, Nokia opened its online software and content store, named Ovi Store, hoping to follow the success of Apple Inc's App Store, and Kallasvuo said users India were among the top five in terms of downloads from the online store.