By Andrew White
Nokia is making a big push for sales in the Middle East and Africa. The Finnish company’s marketing guru, Timo Toikkanen, tells Andrew White the secret of its success so far.
|~|Timmo-3-200.jpg|~|MISSION: Toikkanen is hoping to cash in on the youth of Nokia users.|~|Nokia is making a big push for sales in the Middle East and Africa. The Finnish company’s marketing guru, Timo Toikkanen, tells Andrew White the secret of its success so far.“These are exciting times, and this is a very exciting area for Nokia,” grins Timo Toikkanen.
He has good reason to be smiling. As senior vice president, customer and market operations, for Nokia Middle East and Africa (MEA), Toikkanen has overall responsibility for the sales and marketing of Nokia’s mobile devices, as well as for the network operations in all 69 markets within the MEA region. And in the past year, Nokia's sales in this region have shot up 20%.
With such a performance, it is hardly surprising that Toikkanen’s ascent to such a key position has been a stellar one, having initially joined Nokia in Finland as a lawyer, eleven years ago. He soon moved to Nokia’s Asia-Pacific regional headquarters in Singapore, and in 1999 assumed a new role as sales director for the Hong Kong arm of the firm.
A year later he was handed responsibility for overseeing Nokia’s entire operations in Hong Kong and Macau. From there, he moved to vice president of sales, China South, and then vice president of sales for the whole Greater China area.
These crucial roles, within a number of then-developing mobile communications marketplaces, have given Toikkanen invaluable experience that he is only too keen to utilise in MEA. “[The experience] gives me a good basic understanding of how emerging markets develop,” he says.
“For example, I see more similarities than differences between the way the markets seem to be evolving in MEA to how they did in Asia-Pacific and China five or ten years ago. Things are on the starting blocks in MEA in most markets.
“It’s fairly early days for, for example, deregulation, in this part of the world,” he says. “We have a lot of monopoly markets, we have a lot of duopoly markets, and we have very few operator licences.
“Also, customs duties are still fairly high here. However, they are gradually coming down, as local regulators and governments understand that in order to really foster mobile development they must make sure that people can run mobile businesses.”
Encouragingly, Toikkanen has noted many such improvements over the year he has spent in the region.
“It is crucial to make sure you don’t artificially hold back development by having, for example, very high customs duties or very high mobile prices, which quite often is the starting point in most developing countries,” he stresses.
“Governments in some countries often see taxes or import duties as something they can make a bit of money on, but there are significantly more sizeable benefits, even from a fiscal perspective, for governments who really promote mobility, and get people and small businesses to go mobile as soon as possible. It has been proven that there’s a clear link between mobile uptake and economic development,” he adds.
However, as much as MEA’s economic development might benefit from the presence of such giant communications corporations, Nokia is primarily in the region to make big bucks.
The MEA region, Toikkanen admits, represents a supreme opportunity for mobile communications firms. In particular, Africa’s vast heart is ripe for the mobile revolution.
“Things are happening awfully fast,” he says. “The base from which we’re starting here is much lower than where we started in most of the places in Asia, for example. We have a lot of markets with single-digit penetration, and as a result there’s a fantastic growth opportunity. From a growth perspective, I’m absolutely convinced that this is the most exciting place to be.”
Toikkanen does accept that MEA might have previously been overlooked by the mobile communications industry. Companies, he feels, perhaps failed to attach enough importance to the embryonic markets in much of the region.
“Most multinational companies don’t necessarily see MEA as an area on its own — it’s normally a subset of something,” he admits. “They might have had a head office in the UK or something, but then run MEA operations from Turkey or somewhere similar.”
This attitude, he contends, has changed. Now, MEA is big business. “To my mind, in the past, the industry hasn’t quite offered the focus and investment that it needed to in MEA,” he says. “Now, we’ve set our minds on it and we’re rolling out more and more of a local presence in these markets. Nokia are the very clear market leaders in MEA, so we are not late [in reaching this conclusion]. However, if we had not started now, we would have been too late.”
Toikkanen says that any firm will struggle to find the necessary focus and autonomy, in terms of strategies, product offerings, and day-to-day operational issues, if it is content to work from outside the region it serves.
“That’s why we have come out here and have headquarters out here,” he insists. “This is what we have achieved by establishing a separate MEA operation, not just as a subset of another area, but as an equal animal to Europe or North America or Asia-Pacific, for example.
“Obviously, that’s not to say that sitting here in Dubai tells us a lot about the market in the Democratic Republic of Congo or Nigeria,” he admits with a shrug. “We should not be naïve, and we’re aware that what you see here [in Dubai] is the tip of a very large iceberg.
“If you take the extreme ends of the scale,” he continues, “the first thing that hits you is that the diversity of the markets across MEA is far more than in any other area. At one end you have some fantastically well-developed, very wealthy economies around the Arabian Peninsular. They have spectacular wealth and a tremendous speed of development.
“Then you go to the other end of the scale, where you have some barely emerging economies in central or western Africa, for example. There, you’re talking about very early days in terms of economic development.”
As a result, he says, the entire dynamic of the mobile industry is fundamentally different in MEA, compared to Western Europe or North America.
“The mobile operator plays such a prominent role in this part of the world. There are no subsidies – it’s you and your consumer,” he says. “When you are in this sort of environment, you really need to understand the retail environment, and have your own involvement in the retail management.
“The market pulse is crucial, and you must always have your finger on it.”
“We work with local people, who speak the local language and understand the local culture,” he adds.
“This is the only way for us to understand our consumers, and our consumers’ needs. In order for us to be in the business of connecting people, we need to understand who these people are.
“We feel that there’s a fantastic opportunity in the MEA for Nokia as a company, and the mobile industry as a whole,” he insists as the interview draws to a close. “The growth expectations for MEA are really, really impressive, and we’d like to think we’re more serious about the MEA than anybody else.”
Yet, as much as Toikkanen espouses the firm’s commitment to “local relevance”, Nokia is first and foremost an inescapable, and aspirational, global brand.
“People won’t go for the cheap handset if the trade-off is that it’s not something you’d want to show around,” he admits. “It needs to be affordable, but they still want the design to be pretty nice.”
Toikkanen is, at heart, an elite salesman, in MEA to press Nokia mobiles into the hands of millions yet to embrace the new technology.
“I definitely see value in being your first mobile; being your first ringtone,” he smiles. “If the Nokia tone is the first tone you hear when you turn on your first mobile, it has value. “In this part of the world we have the youngest population of any region, and they are the future decision-makers of MEA, so we see great value in establishing a relationship between our brand, and these people.” There’s the mission statement. You may not use Nokia, but if Taikkonen has his way, your children will.
There is little doubt that Nokia is doing the business in the MEA, but on a global scale the heat is on. The company announced a 6% year on year fall in fourth quarter 2005 profits. Nokia said this was largely because of falling prices of its low-end mobile devices in emerging markets.
It also reported a reduction in net income over the same period to US$1.3 billion, although sales rose by 9%.
The company stated that its total sales of mobile units grew by 28% in 2005, to reach a record 265 million, with a tripling of its W-CDMA market share.
Whether it can keep that number rising remains to be seen. However, with Toikkanen heading Nokia's bid for the ears of MEA, there is every chance it will succeed.||**||