HCL Info and Nokia have extended their distribution agreement for another five years and have also agreed to have a strategic partnership to address the GSM handset market. HCL has been a Nokia distributor for the last 10 years.
HCL Info stock has crashed in early trades and is trading at Rs179 (down 30.61 per cent) at 10.15 AM today on the NSE.
With net subscriber additions of between 4 and 4.5 million new subscribers every month, the mobile telephony market is fast expanding in the country. Coupled with the significantly large replacement market, the total market for mobile handsets runs into billions of dollars every year.
Nokia is estimated to have a market share of around 70 per cent in India, higher than its global share. The company's market share had come down significantly during the period 2001-2003, with Korean companies like LG and Samsung gaining. However, Nokia has made a strong comeback in the last couple of years by launching a wide range of products including handsets specially designed for the country.
HCL Infosystems is one of the largest players in IT hardware manufacturing and marketing. The company ventured into sales of mobile handsets in the nineties after the telecom market started expanding rapidly.
HCL Infosystems has also set up a nationwide network of service centres to offer after sales service on Nokia mobile handsets. The service network is under a 100 per cent subsidiary, HCL Infinet, and currently has more than 200 such centres.
HCL has hardware manufacturing facilities in the state of Pondicherry, with capacity for assembling desktop computers and servers. The company also distributes products of companies like Toshiba.
The company reported a consolidated net profit of Rs63.77 crore for the quarter ended December 31 2005 as compared to Rs60.10 crore for the previous year quarter. Total Income increased from Rs2,001.09 crore to Rs2,799.65 crore.