For Ahmed Khattak, it was personal: He couldn’t buy a phone. An international student from Peshawar, Pakistan, Khattak arrived at Yale in 2004 at the age of 18 with no social security number and no credit history. That meant no one would sell him a cell phone.
In 2007, he went to London for an internship and discovered how to change the game–at the airport, no less, only moments after he got off the plane. “I realized that it was as easy as going to a vending machine, buying a SIM card and [thereafter] paying $22 a month for your phone bill,” he says.
A Business is Born
New Haven CT based GSM Nation’s model is simple: Consumers buy manufacturer-unlocked phones that can be used with any network, then they sign up for significantly cheaper voice, text and data plans through third-party carriers such as H2O Wireless or Simple Mobile–with no multiyear contracts.
These carriers resell blocks of minutes they’ve purchased from T-Mobile and AT&T.
Seed capital for the company first came in the form of a $30,000 loan pooled from friends and family; later it would come from Junaid Shams, who co-founded GSM Nation with Khattak. At the time Shams was in medical school at George Washington University (he graduated in May). “In early 2010, Ahmed came to me with this raw business idea,” Shams says. “We spent the entire night developing it, talking about infrastructure, financing and concept, basically trying to figure out if it was feasible or not.”