Can a leading mobile phone service company also become the country’s largest credit card company?
As Internet-based financial transactions and the growing power of mobile phones envelope the economy, the distinction between a telephone operator and a bank could well blur, Bharti Airtel, the country’s largest private telecom operator with close to 10 crore subscribers, believes it can be become a leading mobile commerce player on the planet, the way it has built up a mobile music market.
Sanjay Kapoor, the company’s deputy CEO, has lined up plans that make the service of supplying content like music and its derivatives like ringtones and music-on-demand a big game as the business moves beyond vanilla voice talk to value-added services (VAS).
Music and SMS now contribute a significant part of its Rs 3,500 crore VAS revenue.
Industry estimates put the organised music industry at around Rs 375 crore to 450 crore in size. Music rights sold to radio and TV contribute another Rs 250 to Rs 300 crore.
“The company is complementing the music industry by legitimising and massifying the content from traditional music companies through innovative and customer friendly applications,” said Kapoor. “We plan to follow similar ethos in our financial services endeavour through mobile.”
Mobile commerce is a generic word for financial inclusion, money transfer and payments through mobile phones.
Bharti Airtel is doing a pilot project a large bank. “Through this project we are able to bring the mobile phone users without a bank account into the banking fold. By the end of this year, we should be able to commercialise the project.”
Industry executives like Kapoor say mobile phones can do what banks should in places where the financial services industry has not reached.
“With more than about 80 per cent unbanked Indians, mobile operators can play a pivotal role in catalysing the financial inclusion movement in partnership with banking entities in the country,” said Kapoor.
Bharti Airtel is currently adding about 55 per cent new customers from rural areas. In the next one year, the company is likely to get about 65 per cent of new customers in rural ares.
Presently, Airtel is offering mobile commerce services on a limited scale, such as insurance premium payments in partnership with ICICI Prudential, toll payments on the Delhi-Gurgaon highway and e-commerce deals in partnership with sites like Yatra.com and Futurebazaar.com.