Bapna: In the context of the Hutch-Vodafone deal, is the mobile market going to continue to grow at the current pace? Is it true that people are expecting the internet to move in to the mobile phone?
Shiv: The growth in the Indian mobile sector is currently at 6 to 7 million units per month. India’s penetration is at 11 to 12% for mobility and at 4 % for fixed landline. The penetration will double this year, it can go to 40 to 50% penetration in the next 4 to 5 years. I think the environment and the opportunity are right. The challenge is the price you pay and then ensure that you deliver against the expectations of that price.

As urban markets are saturated, will future growth come from rural markets?
Small towns and rural markets will constitute the bulk of the first time buyer, a huge replacement market will unfold in the urban sector.

Is the phone going to be used differently?
Consumers look for new features, new technology and style. The Indian market has a huge style element. The bulk of usage will continue to be voice, something like 3G can change the pattern, perhaps into data management and content download etc, but at this point of time it is predominately voice.

Do you think the government is progressive on the 3G spectrum option?
They are progressive - in fixing the reserve price and assigning the conditions. They will be looking at boundary conditions on how to do it. The concern from the auction is that if the price is too high the operators will destroy themselves. The government and

the operators will clearly have to agree on what is sensible.

How does Nokia view its presence in India, is it here for the market or as a manufacturing base? How does it compare with horizontal players like Qualcomm?
Nokia is here essentially for the market. If you are comparing then you should compare with the handset manufacturer’s strategy, the operator’s strategy and the component and the IPR supplier strategies. You need about a 15% value share to be profitable in India. Except Nokia nobody else is above that water mark currently, so competition will invest.

What would you attribute Nokia’s success to?
Nokia is successful here because Nokia has consistently invested ahead of the market in India for the last 11 years - in terms of people, distribution, and brand. Nokia had its focus firmly on mobile phone whereas our competitors had other successful businesses to look after.

The ISB is interested in how ICD can help economic development. Are there any significant base-of-the-pyramid types of initiatives?
For women and children the mobile phone is a safety and security device. For young entrepreneurs and for small businesses-plumbers, carpenters, dry cleaners-it is a source of economic prosperity. Being on call all the time enhances business. In a developing country like India every 10% extra penetration in mobile phones delivers about 0.61% GDP growth. This is a win-win situation, for the government, for women and children, for entrepreneur, for everyone.