Mobile growth and banking boom for Bharti Airtel

Today is a good day for Bharti Airtel – the largest mobile operator in India. Not only has it announced two million more subscribers for the month of August, but it has also announced it is the first network to get the green light for mobile banking services from the Reserve Bank of India (RBI). And since the RBI has announced it wants every single village in India to be banking enabled by 2015, this is a big announcement.

What’s the deal?

Bharti Airtel announced today that it gained 2.03 million subscribers during August – and while that isn’t the largest number for the month (Vodafone Essar got 2.3 million), it still shows Bharti as the largest operator with over 140 million subscribers.

More importantly, however, the network announced that the RBI has given it a license for a “semi closed” wallet service over mobile phones. The mobile wallet idea means that subscribers will be able to load money into an account hosted by Bharti Airtel. That money can then be used to pay for goods either over mobile channels, or using the phone like a pre-loaded debit card. Bharti hasn’t launched any services based on the wallet yet, and says it is evaluating its options.

The reason this is so important is that the RBI, which is the central bank of India and holds the reins on monetary policy, has declared that every Indian must have access to mobile banking services by 2015. Deputy Governer of the RBI, K C Chakrabarty, has announced that mobile banks will be available to every Indian village by that time. However, in this case “mobile” actually does mean “mobile” – the RBI will be sending banks-on-wheels around to each village in turn. The vehicles will offer basic services like deposits and withdrawals.

What we think?

While the “mobile” banks that the RBI has approved might not be the kind of mobile you’re used to, they certainly show how important a wide-spread banking is to the bank. With a new license granted to Bharti for mobile device based finances, this is the time for the operator to prove that mobile phones are more effective than mobile banks for rural India.

The appearance of the phrase “semi closed” is very interesting. It implies that Bharti will have to allow 3rd parties to use the systems they create, but on terms set by the operator – I imagine it will be somewhat similar to the control Apple maintains over developers who want to use the App Store.