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Nokia boss quits as regional office moves to Jo’Burg
Outgoing Nokia East and Southern Africa general manager, Ken Oyolla. He said he is quitting as the firm moves its headquarters to Johannesburg. File
Mobile handset manufacturer Nokia has downgraded its Kenya office from regional headquarter to a sales office and put it under South Africa in a review that saw the exit of its regional head Kenneth Oyolla.
Kenya was the headquarters of Nokia’s Uganda, Tanzania, Zambia, Botswana, Mozambique and Angola operations before the September review of its global operations aimed at reversing its falling market share.
“As of January 2012, Kenya will now be part of the newly formed South and East Africa Area, with its head office in Johannesburg, South Africa,” said Nokia in a statement Tuesday.
“The Nairobi office will continue to function as a local sales office and these changes do mean that some functions currently housed in Kenya will move to the Area hub in South Africa.”
The firm did not disclose whether the changes will lead to layoffs in its Nairobi office, but Mr Oyolla who was in charge of Nokia’s East and Southern Africa operations told the Business Daily that he is quitting the firm next month. “I have opted to leave as the mandate in the new structure is different and does not suit what I am looking for,” said Mr Oyolla who is now serving notice till December.
The move by Nokia to downgrade its Nairobi office will go against the grain as multinationals are racing to establish their regional headquarters in Nairobi, eyeing the East African common market. The geographic position of Kenya that makes it easy for global firms to coordinate their Sub-Saharan operations has also acted as bait for the multinationals.
Stiff competition
Heineken, Nestle, Airtel, IBM and Coca Cola are some of the global firms that have regional offices in Kenya. (READ: Global firms pitch camp in Nairobi to tap new markets) The review of the Finnish giant operations comes amid stiff competition in the handset market that has seen it lose it lose grip of the global market as firms such as Apple and ZTE.
A report released by Gartner last month indicates that Nokia global market share dropped to 22.8 in August from 30.3 per cent same period last year with its overall pieces sold over the period dropping to 97,869.6 from 111,473 in 2010. ZTE, which has introduced cheaper smart phones, increased its global market share to three per cent in August 2011 from 1.8 per cent in the same period last year while Apple’s increased to 4.6 per cent from 2.4 per cent in the period under review.
This has seen the Finnish giant redraw its boundaries and close some manufacturing units in a process that saw it shed 3,500 jobs in September and 7,000 jobs in April. The job cuts represent around 12 per cent of Nokia’s mobile phone business workforce, part of the company’s plans to cut its operating expenses by € 1 billion (Sh120 billion) by 2013.
Over the last few years, Nokia has observed an erosion in its mobile phone operating system market share due to stiff competition from Google’s Android, Apple’s IPhones and Research in Motion’s BlackBerry. In Kenya, the firm has seen increased competition from Huawei, Apple and Samsung especially in the high-end of the market that is served with tablets and smartphones.
In the low and mid segment of the market, firms such as ZTE and cheaper counterfeits from Asia have been munching its marketshare.
The Anti-Counterfeit Authority says that the country loses nearly Sh3.2 billion annually through tax evasion and sale of counterfeit phones, which is emerging as a money minting machine in downtown Nairobi and across major urban centres. But the CCK has asked mobile phone operators to block counterfeit handsets from January 2012.
