Nokia’s brand image in India might be in shambles, CEO to visit next week

Calling the BL-5C battery recall situation a nightmare for Nokia (NYSE: NOK) would be an understatement. With news that the Finnish giant knew about the defective batteries almost 8 months ago, people are starting to wonder why nothing was done sooner. What really takes the cake is India; a market experiencing the fastest growth in wireless telecommunications, a region that is critical to success in the emerging markets. People have gone stark mad, one service center even requested the assistance of the police for added security.

Over 165,000 text messages have been sent to Nokia by customers trying to figure out if their battery is defective, of those only 4-5% seem to be effected. The major local operators, Airtel and Hutch, have committed to helping Nokia since they have nothing but good things to say about their influence in the region thus far:

 ”Both on infrastructure and terminal side, Nokia plays a significant role. I genuinely believe any company taking such a pro-active intervention, as by Nokia, is a good sign of consumerism in India and this reaffirms our confidence in them,” Sanjay Kapoor, President, Bharti Airtel Mobile Services.

He later added: “They are not worried about money but only about their customers.”

Harit Nagpal, Marketing Director of Hutch, said: “There are always chances of failure in operations or businesses such (as the one) run by Nokia, it is how effectively you communicate it with your customers and recover from crisis (is what matters). In my opinion, the scale at which Nokia is communicating with its customers it looks like a great act of responsibility.”

Nokia CEO, Olli-Pekka Kallasvuo is scheduled to visit India for 2 days, August 22-24; whether or not it is related to the BL-5C situation is speculation on my part. It would be nice however if he got on Indian television and radio to apologize to the people and give them more detailed instructions.

Figures have yet to be tabulated, but we do expect that the unpopularity of this recall will have a negative impact on sales:

D Kishore, Director (Marketing) of Nokia India, said: “Sentiments have not been impacted at all. Rather sales have gone up. Although we do not the exact numbers right now but there is sudden fall.”

How much longer this sudden fall will last will be the interesting thing to watch. Nokia’s Q3 results will be reported on October 18.