Satya Nadella's appointment as Microsoft CEO lightens up Nokia India’s Chennai plant

BANGALORE/CHENNAI: News of Satya Nadella becoming the new boss of Microsoft brought hope to the 10,000 workers at Nokia India’s Chennai plant. Since the news came late at night, most of the employees working in the earlier shift had left for their homes. Many believe that when Microsoft eventually takes complete control of the Chennai plant by the end of the fiscal year, Nokia India would be better prepared to face competition in the Indian mobile market.

“Since an Indian has taken over, I’m sure, more importance would be given to the Chennai plant,” M Saravana Kumar, president of the Nokia India Thozhilalar Sangam (Nokia India Employees’ Union) told ET. “The Chennai plant has always been the best for Nokia and will do the same under Microsoft. I hope the new management gives us clear guidelines on what they expect from the Chennai plant.”

One of the biggest challenges ahead of the new chief executive would be to turn around Nokia’s India operations. Nokia India, which started selling cell phones in the country in 1995, has been losing market share to other handset makers, including homegrown Micromax. Nokia India’s market share fell from 62.5% in 2007 to 27.2% by the end of 2012.

Compounding problems for Nadella would be the tax issue the handset maker faces: tax authorities claim Nokia’s Indian subsidiary owes it Rs 21,153 crore as total tax liability (existing and anticipated), including penalty during a seven-year period from 2006 to 2013.