Three billion and counting

India is too big to comprehend on a three-day trip. But one thing I learned during a recent visit to New Delhi is that there are hundreds of millions of farmers in rural India who have gone without simple telephones and reliable communication services for quite a long time.

Something else I learned is that many of them will soon own Nokia phones that are even more sophisticated than my own.

You see, I am what Nokia refers to as an “entry-level user.” Despite all the features available on the market, I have not bothered to move beyond my basic calling and texting needs. I still tote around a primitive Nokia 3330. It’s not that I couldn’t upgrade if I felt like it — it’s just something I never got around to doing.

Those hundreds of millions of rural Indians, on the other hand, will soon have a line of seven new Nokia phones to choose from — all of them under $120. The cheapest, most basic models — the 1200 and 1208, both available for around $45 — have color screens and a built-in flashlight for brownout-prone rural areas. In this alone, they already kick my 3330’s ass, in terms of features.

But my cell phone’s limitations are beside the point; Nokia’s rollout of new mobiles was why we were in New Delhi. The Finnish company claims 36 percent of the world’s market for cell phones, and it’s looking for its next billion customers. Where is it looking? How about India, the fastest-growing cellphone market, with a population of 1.06 billion people — a place that adds six million cellphone subscribers per month, or 10 every second?

Nokia originally wanted to hold its launch at Safdurjung Railway Station in Delhi — symbolic of the country’s still widely used rail connections, serving 11 million people. But logistics instead led them to set up mock train tracks inside the Shangri-La Hotel conference room, where Nokia’s senior vice president of Entry Business Unit Mobile Phones Soren Petersen, vice president and managing director of Customer and Market Operations for India D. Shivakumar, and senior vice president of Customer and Market Operations in Asia Urpo Karjalainen waved railway flags onstage to kick off Nokia’s penetration drive.

Driving around Delhi’s streets before the Nokia launch, I was surprised: the weather was a lot milder than the 45 to 48 (Celsius) degrees we had been warned about. Even more strange, there were no people in Delhi. I mean, very few. For a city of 13.78 million, it was eerie. No traffic. Few pedestrians. Where do you hide 13.78 million people? It turned out to be Buddha’s birthday, a holiday, so most people were probably praying in temples or had left town. The weather could be explained by unseasonable rain showers, which brought the Celsius down to a manageable 28 degrees.

We settled in for Nokia’s road show — a program titled “Everyone Has A Reason,” suggesting that cell phones are not only flashy gadgets for India’s small population of rich urban professionals, but a necessary communication device for poor and emerging markets in rural areas. Nokia has successfully used this approach before in Africa. Ads emphasize the security and comfort of owning a cell phone — hot-button selling points for women, it turns out. For men, there’s the possibility of bringing their farming business into the 21st century through greater efficiency — ordering spare parts, livestock feed, etc. In short, there are a billion specialized reasons to own a phone out in the boonies — and Nokia has crafted plenty of ads and models to drive home the point.

Of course, owning a phone is only part of the game. After scraping together five months’ salary to afford your first $45 Nokia, you have to have server access in remote areas — a task Nokia’s partner, Siemens Technology, has been working on. The short-term solution seems to be the Village Connection — a system of micro-entrepreneurial setups, basically people operating a widespread network of wireless antennas to reach 200 phone users at a time — until national coverage happens.

Of course, the Philippines has been there with national wireless coverage for about half a decade. But the Philippines is much smaller in size and population, and its people have shown a unique adaptability to new modes of communication. Hell, Filipinos arguably got the world texting in the first place!

A chat with Nokia’s Antonio Torres, director of Business, Development and Industry Marketing for Mobile Phones, confirmed that the Philippines is no longer considered an entry-level market. He cited prepaid phone cards, and how Smart’s innovative low-load cards led to a high 45-percent penetration among Filipinos.  Clearly, the Philippines is not a place that needs instruction on the joys of owning a cell phone. “I would say the Philippines was an early adaptor” to consumer-driven mobile phone use, Torres noted. That’s an understatement.

Still, these seven new Nokia phones will be launched to salivating customers in the Philippines by the third quarter of 2007. While at the press event, I unsuccessfully tried to purchase myself a 2630, known as the “Barracuda” — the sleekest mid-range model, equipped with GPRS, Bluetooth, WAP browser, FM radio, MP3, video recorder and 2-megapixel camera. No dice; I’ll have to wait until it comes out in Manila.

Besides the entry-level 1200 and 1208, there’s the Nokia 1650 (a step up with an FM radio, voice recorder and greater pixels); there’s also the Nokia 2505 CDMA, a clamshell model with an FM radio and high-color screen, for “the style-conscious consumer who craves simplicity”; and the 2660 and 2760, loaded with the same features as the “Barracuda,” though less flashy in design.

Later, Petersen explained that Nokia understands the needs of the emerging market, the billion people for whom a personal computer may be an unrealistic dream — but a cell phone that can connect to the Internet could actually be attainable.

“At entry level — especially in the Third World or emerging rural markets, like India or Africa — it’s all about value and trust,” he said. In, say, northern Rajasthan, where tractors and camels are more plentiful than cars, a customer’s biggest concern won’t be flashy features, it’ll be a phone with a long battery life. “This might be a 30-euro phone, but still, for these people, it’s five months’ salary,” Petersen added.

Still, this emerging market is where 80 percent of Nokia’s next billion phone sales will come from. And the trick is to keep them coming back. “It’s about quality,” Petersen noted. “You won’t be able to find something better at that price. You can find a shady guy down an alley selling reconditioned phones, or cheaper knockoffs, but not the same quality.”

“Buying a phone represents the same thought process for the rural customer as a mid-income consumer buying a car,” added Shivakumar. “They can’t afford to buy something that will break down.”

And, it need not be added, cell phones are a lot cheaper than computers — never mind Dell’s long-promised $100 computer. “A recent report says the $100 computer now costs $175 to build. And I can tell you, for $175, we can sell an awful lot of these,” said Petersen, holding up a Nokia 1650.

“I believe the notion of a PC in every rural home on the outskirts of Africa or other outlying areas is not achievable,” he continued. “With our knowledge of what it costs — we buy display screens, we understand the cost basis of displaying anything — I’m much more a believer that this thing will happen through the cellular technology and cell phones. We do as good Internet connectivity and all the applications, and you don’t actually need anything else for access.”

In rural India, he explained, people will probably buy a TV before they buy a refrigerator. In the future, he hinted, this TV screen will be a display for their cell phone’s Internet connectivity.

We couldn’t help pointing out to Petersen that, in the Philippines, people will purchase a cell phone before they buy a TV or a refrigerator, and a prepaid cell phone card instead of food. But that’s just because they like to stay connected.