State of Telecom Industry in Pakistan

Guest Post by Ammar Faheem

Mobile commerce, mobile payments, banking via mobiles, cell phone based financial transactions (or whatever you would like to call them) have been discussed and debated all over the world over the past few years. Basic m-commerce applications have been introduced already in several countries, including Pakistan.

It is widely anticipated that telecom operators and vendors pose a serious challenge to the banking industry as they take electronic banking or e-banking mobile.

Speaking of statistics, a total of 1.6 billion bank accounts exist worldwide. Compare this to 4 billion cell phone users. Speaking of Pakistan, the banking industry is host to close to 20 million bank accounts as compared to over 90 million cell phone subscribers. Telecom operators and vendors have good enough statistical evidence to believe they already have a head start!

Giving this notion a further boost is Nokia, one of the pioneers and trend-setters in the telecom industry. Nokia has recently acquired a minority stake in OBOPAY said to be valued at close to $70 million. OBOPAY specializes in mobile and electronic payment solutions and services.

Nokia has launched a new product venturing into mobile commerce, Nokia Money. Nokia money offers access to basic financial services to all cell phone customers and said to benefit the masses who have had no access to any financial services in the past. Is this the beginning of a new financial order for the world? May be it is too early to say but it sure sounds possible.

Nokia Money has been designed to be as simple and convenient as making a voice call or sending an SMS. It will enable consumers to send money to another person just by using the person’s mobile phone number, as well as to pay merchants for goods and services, pay their utility bills, or recharge their prepaid SIM cards (SIM top-up). The services can be accessed 24 hours a day from anywhere, meaning savings in travel costs and time. Nokia is building a wide network of Nokia Money agents, where consumers can deposit money in or withdraw cash from their accounts.

“We believe mobile financial services offer a market opportunity with long term growth potential. In many countries, mobile phone ownership significantly exceeds bank account usage, suggesting that many mobile phone users have very limited or no access to basic financial services. With more than 4 billion mobile phone users and only 1.6 billion bank accounts, global demand for access to financial services presents a strong opportunity to combine mobile devices with simple but powerful financial services such as Nokia Money”, said Mary McDowell, EVP and Chief Development Officer, Nokia.

“Rural consumers will particularly benefit from money transfers and, for urban consumers used to online services, we are enabling services such as payment of utility bills, purchase of train and movie tickets, top-ups, all through their mobile phones. Nokia Money is simple to use, secure and available across different operator networks and on virtually any mobile phone. This means millions of new consumers will soon be able to manage all their financial needs from their mobile phone”, said Teppo Paavola, VP and Head of Corporate Business Development, Nokia.

Source: Daily Mobile

It is expected that the service will be rolled out to selected markets in the first quarter of 2010.

Let us recall the partnership agreement reached between VISA and Nokia to deliver Visa payment and payment-related services – including contactless payments, remote payments, money transfer, alerts and notifications.

Nokia seems to be taking m-commerce very, very seriously. In the long run, and if statistics are to be believed, mobile banking is truly going to give the banking industry a run for its money.

It is yet to be seen how banks manage to overcome this challenge and how they enter into partnerships and programs with mobile operators locally and internationally to introduce mobile banking services to not only retain existing customers but also attracts those who have cell phones but no bank accounts.

Ammar is a Business Development Executive at a leading technology company which focuses on e-Banking.