back Back

Telcos can partner with FinTechs to secure the smartphone that they finance: Datacultr CEO

By Priyanka Pani

April 20, 2020

  • Datacultr
  • Dubai

By Neel Juriasingani, CEO and Co-founder, Datacultr

How Telcos can ‘lend a hand’ towards smartphone adoption in India

Over the last couple of decades, the Indian telecom industry has become a global case study of fast-paced-mass adoption. The transition of subscribers from fixed-line telephony to 2G, 3G, and 4G has been astonishing, by several measures. The growth in smartphone adoption has been further fueled by the Government’s push to position the country as a global hub for manufacturing and successfully bringing leading brands to produce and export phones from India.

However, as the country of 1.3 billion expects to have 859 million (~84% population) smartphone users by 2022 as per a joint study by ASSOCHAM & PwC, the law of diminishing marginal utility has already kicked in. The growth in the number of new smartphone buyers has slowed down tremendously. It is because potential consumers are finding smartphones expensive and are unable to afford it.

Concerns for telcos and revenue flows 

It is not only a concern for smartphone manufacturers but also for telecom operators that invest in the tunes of billions of dollars in setting up the infrastructure. These companies make this investment upfront, and revenue flows in once subscribers start using their services.

When the pace at which new smartphone subscribers join the network slows down, the growth in data service revenue for telecom companies will slow down. In other words, they will have large chunks of unutilized internet bandwidth. To change the game, these telecom operators will have to look for ways to make smartphones more affordable, especially for people at the bottom of the pyramid.

We have already started seeing some efforts in this direction, as top telecom providers are partnering with smartphone manufacturers to provide attractive packages, subsidies, and financing schemes. While there is a more substantial business prospect for them, when new smartphone users subscribe to their services, there is always a business risk, in case the buyers do not pay their EMIs on time.

Partnership with FinTechs

Thanks to technology, telcos can now use the smartphone that they are financing as collateral. To do so, they can partner with fintech companies that provide solutions to track the device in real-time. In case the payment is not on time, telcos can send red flag alerts as notifications, block certain features on the device, or even wholly lock the device. The technology also allows telcos to send push messages in rich & interactive formats, which build financial literacy among users. Thus, they understand the importance of paying EMIs on time and maintaining a good credit score.

Given that smartphones are a critical asset and an essential source of income these days, telcos can secure their investment and cover the business risk to a large extent. The technology also builds more confidence among telcos and smartphone manufactures who are looking to innovate bundled offerings to the consumers.

As more people use smartphones, telcos will witness higher utilization of their data services. It helps them achieve break-even on their new investments and hit profitability faster. As far as the longer term is concerned, this investment by telcos will help in strengthening the momentum of smartphone adoption in India and support the Digital India movement.

(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of  IBS Intelligence.)

Previous Article

April 11, 2020

How Banks Can Acquire Customers Within 3 – Minutes Amid Covid Lockdowns

Read More
Next Article

April 24, 2020

Ingenico ePayments says wearables, sound, NFC will dominate digital payments in India

Read More

IBSi Daily News Analysis

Wealth management, HNIs, HNWIs

June 02, 2023


How wealth management firms can grow revenues in a declining market

Read More

IBSi FinTech Journal

  • Most trusted FinTech journal since 1991
  • Digital monthly issue
  • 60+ pages of research, analysis, interviews, opinions, and rankings
  • Global coverage
Subscribe Now

Other Related News

June 02, 2023

Sikoia chooses Yapily to provide Open Banking access to its clients

Read More

June 02, 2023

Standard Life selects Moneyhub for open finance integration

Read More

June 01, 2023

BNY Mellon to establish Global AI R&D Hub in Dublin

Read More

Related Reports

Sales League Table Report 2022

£1,500.00 / year

Know More
Global Digital Banking Vendor & Landscape Report Q1 2023

£1,500.00 / year

Know More
Wealth Management & Private Banking Systems Report Q1 2023

£1,500.00 / year

Know More
Global Transaction Banking Vendors and Landscape Report Q1 2023

£1,500.00 / year

Know More
Treasury & Capital Markets Systems Report Q1 2023

£1,500.00 / year

Know More

IBSi Sales League Table

The industry acknowledged barometer of global banking technology vendor performance!
Get your copy now!
Get your copy now! IBSi Sales League Table 2022