Nokia has followed Indian tax laws to a tee: Shivakumar

The outgoing Nokia senior vice-president (India, Middle East, Asia) D Shivakumar defended the company against the tax departments claims of tax evasion. He also said to operate in India, corporates need patience.

After an eight-year stint, Shivakumar will quit Nokia on June 30. Sivakumar led Nokia India between 2006 and 2011 and has seen the company rise to the top and lose market share over the last few years. In an exclusive exit interview, Shivakumar says “I would really be surprised if any global CEO said India is not an important market for us.” Also read: Bharti slips after Vodafone cuts data charges, RComm up 11% Below is the verbatim transcript of his interview to CNBC-TV18 Q: What will drive Nokia, will it be Asha or will it be Lumia? A: I think both. Q: Can it really be both, I mean Apple is Apple, it is the iPhone and the challenge that they are also facing right now is should there be a cheaper iPhone or not?  A: I think they will do a cheaper iPhone. That is my guess because if you want to grow it is required. The world has seven billion people. This year for the first time two things are going to happen in technology. 1) Smartphones will sell more than a billion units this year. 2) A very important one is the mobile internet will be bigger than the fixed internet. So, this is been a talk which is being going around. People used to say mobile internet, we will see, etc. Today it is reality. That will fundamentally alter the way people will look for information, the way people will buy and more important the way consumers will transact will brands and companies. I think every company will have a digital or a mobile business model in the future. Q: But you have a brand problem don’t you because as far as the high-end smartphone market is concerned, one thinks of Apple, Samsung or Blackberry and not Nokia necessarily. So, you are probably ahead as far as products is concerned, you may have all of the features and so on and so forth but there is a brand problem? A: If you look at all the traction for the Lumia range whether it is the 920, 820, 720, 620 you will see that it is gaining ground significantly. So, for example Nokia has sold as of March 2013 19.9 million units of Lumia already. Almost every quarter we are doubling. It is on line with the strategy that trajectory is right. Q: Let us talk about Asha because you just said that you believe Apple will do a cheaper iPhone. You have tried to do the cheaper smartphone with the Asha, USD 99 is what you are talking about. How much lower can it get? A: Price in every sector has never generated value. The only thing that has generated value is innovation. For example, 60 percent of the phones sold here in India will not be allowed in most of the European countries or America because the basic standards are not met. Q: With the income tax department slapping the Rs 2000 crore notice on Nokia how much of a setback is that been as far as doing business with India is concerned? A: We have followed all the laws, to the letter, every single thing. The issue is interpretation. Someone who is looking at the same thing will interpret it differently and so no you need to pay a profit on this transaction also. We have got enough legal, consultant and international opinion to say what we have done is right. In this case a constructive dialogue is the answer. It is not for the media to repeatedly say here is Vodafone and here is Nokia, here is somebody else and they are tax evaders. Q: But where does the constructive dialogue actually led you because you moved to Delhi High Court, there has been no positive movement for you on that front, where is the constructive dialogue? A: That is the democracy. If you operate in markets and democratic institutions like India, it takes time. So, one of the things on dealing with India is you have to have enormous patience. One needs to have patience for the process to go through, for the institution to take its view and do the right thing. Q: Is the global headquater (HQ) losing patience with having to do business in this sort of an environment? A: I don’t think people will lose patience. People invariably look at India and say: "Here is a great country and a great market. We really wish they could iron out these little things which hamper smooth progress". That is the way most people will look at India today. I would really be surprised if any global CEO said India is not an important market for us. They will not be able to say that because India is too important today and will be even more important in the future.