Airtel, Voda, Idea may see about 50% growth in m-wallet transactions

KOLKATA: The Big 3 of Indian telecom - Bharti Airtel, Vodafone India and Idea Cellular are slated to collectively see a 40-to-50% growth in mobile wallet transactions following the Modi government's decision to ban high-denomination currency notes, analysts and industry experts said.

The withdrawal of Rs 1,000 and Rs 500 notes announced on Tuesday, they said, is unlikely to immediately translate into a sizeable jump in revenue from wallet services, although it is expected to help retain customers.

"The demonetisation exercise is a huge positive for Airt el, Vodafone and Idea's wallets business and their combined m-wallet transaction volumes should see a minimum 40to-50% sequential growth after the next two quarters," Ajay Srinivasan, a director at Crisil Research who tracks telecom, told ET.

Wallet services, he said, contribute 2% to a telco's revenue and could help the biggest companies hold on to their midand top-end customers amid rising competitive intensity, especially once users "get hooked to the convenience of mobile payment channels for small purchases."

Wallet services are offered by telcos typically as an app on a smartphone where cash can be sto red digitally and used to pay utility bills, buy movie and railway tickets, recharge mobiles and top up DTH services. Market leader Bharti Airtel declined to quantify the potential impact of demonetisation on the growth of its wallet services business and said that it would boost growth of a digital payment ecosystem and accelerate India's move to a cashless economy.

"Our wallet services are already available to customers and we are adding more merchants to boost usage levels and also plan to roll out our banking services very soon," said Shashi Aurora, managing director of Airtel Payments Bank. Vodafone India, the secondlargest telco, declined to comment on the potential impact of the demonetisation move on its M-Pesa mobile money business. Idea Cellular declined to respond to ET's queries. The value of mobile payment transactions in India will exceed Rs 2,000 trillion in FY22 from a shade over Rs 8 trillion in FY16, according to an Assocham-RNCOS study. Hemant Joshi, a partner at Deloitte Haskins & Sells LLP, said the cancellation of Rs 500 and Rs 1,000 notes would boost cashless transactions with the increased use of digital wallets, debit and credit cards.