Q. What is the revised validity of HCL's distribution agreement with Nokia ?
A. The current agreement expires in August 2006. The agreement has been extended for another five years, to August 2011.


Q. Is the agreement exclusive i.e. can Nokia get in more distributors at a later date ?
A. In India, both Nokia & HCL have jointly decided to pursue a different strategy. Nokia will work jointly with HCL to further penetrate the market. We believe, with the strengths HCL brings to the partnership, that the relationship should continue as today.


Q. Is HCL exclusive to Nokia? Can HCL sell other vendor handsets in the territories where Nokia is going to bill henceforth?
A. We would want to continue with Nokia in the GSM handset space.


Q. What does "Jointly address" & "co-exist as distributors" mean?
A. As per the revised arrangement, Nokia would add certain areas for direct billing by them so as to ultimately maintain a balanced channel mix, for GSM handsets.


Q. What would "balanced mix" mean in terms of revenue split?
A. Growth rates and telecom penetration rates going forward are as yet evolving. It is difficult to accurately forecast revenue mix. However, the intention is that balanced mix would mean the volume would eventually be shared approximately equally.


Q. When & how would the bifurcation of territories happen?
A. We plan to start with a pilot implementation in two cities shortly. Based on the progress, the movement forward would be in a staggered manner over a period of time, around 1 ½ years.


Q. What are the benefits of a five year agreement signed with this balanced mix?
A. Some investors have been asking that you have a ten year successful relationship with Nokia, why not sign a longer term agreement in writing. We believe that the new agreement gives all concerned a longer term view of the business and comes at a time when the subscription growth is touching an unprecedented trajectory. We believe it is good for all HCL stakeholders and the company for long term planning.


Q. Nokia business forms a large part of your revenue in the last few years. What are your plans going forward?
A. We believe we are part of two growth engines - the domestic PC business and its associated services, and the phone business. The PC penetration continues to be low and, therefore, offers strong potential for growth. The inflection point could be fast approaching what with low cost broadband and multilingual software now clearly in sight.
In addition we are planning to expand our HCL retail franchisee stores over the next 8-12 months to take into account future growth for PC's, notebooks, accessories, digital lifestyle products and the like. This will further position us well to take care of the growth in the consumer segment ahead. For your information, we have been again ranked #1 in desktop PC's by IDC, for the 6th year in a row, for the year 2005.