Having taken a beating after the recent battery incident in the Indian market, Nokia, the leader in mobile communications, is working on placating Indian consumers, who now comprise its second-largest market after China.

Olli-Pekka Kallasvuo, president and CEO, Nokia Corporation, who was in New Delhi on Thursday, had recently announced an investment  $100 million over the next three years, including the setting up of a telecommunications equipment manufacturing facility in Tamil Nadu for wireless network equipment. Production is expected to begin in 2008. In a chat with Priyanka Joshi, he outlined his plans. Excerpts:

How much has the battery defect incident affected Nokia as a brand in India?  

We continue to investigate the issue, but Nokia India did a proactive job in communicating the issue to our consumers. We will work very closely with our vendors, who supply electronic components, to ensure that our standards are not compromised. We are confident of mitigating our risks through better services to our consumers. We are not giving estimates of losses, but we believe Matsushita is responsible for the incident. We do not fear a market loss following this incident. 
 
Will Nokia consider adding to its Chennai manufacturing facility's capacity?

Within 18 months of setting up the India manufacturing facility, we have started exporting to 58 countries from the Chennai plant. India's manufacturing base is extremely critical to our infrastructure, including the cost factor. Essentially, our plans are to use India as a global manufacturing base instead of producing just India-specific products.  

So, is India just another low cost manufacturing base for you?

Not in anyway. Our India manufacturing unit is second to none. Currently, the manufacturing plant is involved in entry- to mid-level production, but we are not ruling out manufacturing high-end handsets from India.

In fact, we also chose India as the location for the first in a series of satellite design studios as part of establishing design hotspots around the world. This signals the increasing impact the country has on the development of mobile phones.

Established via a two-year partnership with the Srishti School of Art, Design and Technology in Bangalore, the studio will give Nokia designers and India's talented young designers an opportunity to work together on new phone design ideas for India and the global markets.

What are your plans for Nokia Siemens Networks in India?

Nokia Siemens Networks, a leading global enabler of communications services will appoint a services business unit head (headquartered in India), a move aimed at accelerating the transformation of Nokia Siemens Networks' in the face of anticipated growth in the new and emerging telecommunications
markets. We are also committed to the establishment of several offices in major cities across India and the opening of a research centre in Bangalore.  
 
Post Apple's iPhone launch, how is Nokia planning to capture consumer interest?

Consumers can expect a touch-based device from Nokia.

Besides, we are competing with iPhone with our N95. And not to forget the Nokia music stores that will give existing services (iTunes among others) a tough competition.