Nokia to shut Indian mobile money service

Mon Mar 12, 2012 4:36am EDT

Nokia President and Chief Executive Olli-Pekka Kallasvuo talks about money transfers with mobile phones during the 2010 International Consumer Electronics Show (CES) in Las Vegas, Nevada January 8, 2010. REUTERS/Steve Marcus

Nokia President and Chief Executive Olli-Pekka Kallasvuo talks about money transfers with mobile phones during the 2010 International Consumer Electronics Show (CES) in Las Vegas, Nevada January 8, 2010.

Credit: Reuters/Steve Marcus

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(Reuters) - Nokia (NOK1V.HE) will close down Nokia Money, a financial service it runs in India, as it continues to narrow its focus on its phone business and location-based services.

"The mobile financial services business is not core to Nokia so we plan to exit the business," said a spokesman for the company.

After regional launches Nokia opened the India-wide service only late last year and was planning to expand it into several other emerging markets.

Financial services are seen as one of the major business opportunities in the wireless industry but so far have become a big business only in Kenya and the Philippines, as tight regulations and the lack of a business model have restricted take-up elsewhere.

Telecom operators, banks, credit card companies and technology firms like Nokia have been fighting to get a piece of the potentially lucrative business.

"The market is crowded and the role of Nokia in that business was questionable," said John Strand, head of mobile consultancy Strand Consult.

Nokia is in the midst of revamping its operations under Chief Executive Stephen Elop, who was hired in September 2010 to turn the company round.

The company has closed down most of the mobile services launched under previous management and has also cut thousands of jobs as it continues to battle falls in its market share.

(Reporting by Tarmo Virki; Editing by David Holmes, Greg Mahlich)

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