Nokia restructuring leaves buyers without warranties

Mobile phone traders in Abu Dhabi will file a complaint to the competent UAE authorities against Nokia, accusing it of inflicting heavy losses on them by its decision to restructure its agencies in the UAE, dealers said yesterday.

Representatives of some of the nearly 100 mobile phone shops at Defence Road in the capital flocked to the Ministry of Economy yesterday and were told to bring copies of their trade licences and lodge an official complaint.

Dealers accused the Finnish cell phone giant of causing losses to them and to mobile phone users by its decision to abolish some of the Nokia agencies in the UAE, leaving only three authorised dealers to distribute its products.

Authorised dealers and mobile phone shops received a letter from the Dubai headquarters of the Nokia Corporation last week that only Axiom, Aikon and Emirates Computers are authorised to distribute and guarantee its products.

The letter said permission for distribution had been cancelled for all other agents and distributors, including Jumbo, Cellucom, and Aptec. The letter, showed to Emirates Business, instructed Nokia's maintenance centres to accept Nokia handsets that are bought only from those three authorised dealers.

"The decision took effect on May 31 and this means all the Nokia phone we have sold before that date are not entitled for company warranty if they were bought from those dealers whose licence has been cancelled," said Bashar Asaad, owner of the Damascus Flower mobile phone shop in Abu Dhabi.

"A group of mobile phone dealers went to the Ministry of Economy yesterday and we informed them about the problem. We were told to form a delegation and bring copies of our trade licences to file an official complaint. We are now preparing to do so because this decision by Nokia has inflicted heavy losses on us and damaged our credibility among our customers."

Nokia sources in Jebel Ali confirmed the decision but defended it as a measure to organise dealership and sales of the company's products in the UAE. They said some of those dealers whom had been written off had marketed imported Nokia phones along with the products they had obtained from the company.

"I don't know how Nokia is justifying the measures it has taken against those agents but we have been badly hurt by such a move. We have sold thousands of Nokia handsets over the past few months and many of them carry company warranty by those abolished agencies," said Othman Jove, sales manager at Crown Prince, one of the largest mobile phone dealers in the Capital.

"Now if a customer comes to me with a damaged Nokia handset, it no longer has a company warranty. So my shop is responsible for repairing it at its own expense. But this is not the only problem. Most customers will certainly insist that the phone must be repaired or replaced by the dealer not the shop."

Nokia controls nearly half the UAE mobile phone market, one of the largest in the Middle East, with an annual turnover of more than Dh1 billion. A large queue of mobile phone users were seen arguing with employees at the Nokia Care centre on Defence Road yesterday when they were told that their handsets are no longer warranted.

"I told them to go back to the shop where they bought the phones from but they could not understand what is going on. I have instructions here that only Nokia handsets stamped Axiom, Emirates Computer and Aikon are entitled for warranty," said a Nokia Care centre employee.

Mobile phone shop owners said they said had a large quantity of Nokia handsets bought from those ex-agents, adding this could cause them big losses. "These phones can now be sold only without warranty," said Abdul Monem Hariri, Manager of Asala mobile phone shop.

"This means we have to sell them much below their cost price or give the customer a shop warranty, which of course no one would accept. Imagine the size of losses when you learn that thousands of those handsets are stacking the shelves of the shops on Defence Road. What we are asking for is a grace period and a retraction of the decision that the phones which have already been sold do not qualify for company warranty."

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