State of Telecom Industry in Pakistan

Blogs are abuzz about the $70 million investment by Nokia in a mobile-phone-payment system called Obopay. A good article in Technology Review magazine sums the current trend of investment in mobile payment infrastructure. This will become the key to how first-time users of electronic commerce enter the global marketplace.

The investment by Nokia suggests that, even in a plunging global economy, mobile financial services are guaranteed to grow in many of the world’s poorest nations.

In these parts of the world, many people lack access to traditional bank accounts and other financial services, but own mobile phones. Leveraging those phones as a way for people to access bank accounts, pay bills, borrow money, and pay loans is “a market that is exploding,” says Carol Realini, Obopay’s CEO. Realini believes that mobile-phone technology will affect financial services in a number of ways. “It will allow transactions in checks and cash to be done electronically,” she says. “That is the source of the opportunity that is unfolding around the world.”

But Realini hinted at a huge scale-up in the global availability of mobile-payment services, especially given that about 1.3 billion Nokia phones are in circulation. “It really is about serving the globe,” she says. “[Nokia] makes around 1.2 million phones every day–we can add our capabilities to their distribution.” A Nokia spokesperson says that the company could not comment on the investment because it is in a quiet period ahead of an earnings announcement.

Obopay, based in Redwood City, CA, operates in the United States and India and is one of a handful of services that lets people transfer money to one another between bank accounts using a cell-phone software application or a text message. (Users can also do so via the Web, mobile or otherwise.) In the United States, Obopay charges a fee to users sending money (25 cents to send any amount up to $1,000). In India, fees for banking services are paid by banks, which have willingly done so because the service allows them to cultivate new account holders without having to build new retail branches. Obopay does not disclose its total number of customers in either country.