After signing a pact to drive financial inclusion in India in January 2011, Vodafone India and ICICI Bank finally launched mobile money transfer and payment service M-Pesa in the eastern parts of the country in April 2013. BMI has been bullish about the growth prospects of mobile financial services in emerging Asia given its underdeveloped traditional banking system, and we believe that operators such as Vodafone India, which have ample experience gained from their African operations, should see a good degree of success being replicated in the region.
|High Hopes For India|
|Safaricom M-Pesa Subscriber And Revenue Growth|
Vodafone India and ICICI Bank originally planned to launch M-Pesa by end-2012 through their subsidiary Mobile Commerce Solutions . The reason for the delay was not disclosed , but the service is now available in Kolkata, West Bengal, Bihar and Jharkhand through 8,300 authorised agents while a nationwide roll-out will be done in a phased manner. A trial of Vodafone India's M-Pesa service ( then branded as M-Paisa) was launche d in Rajasthan in November 2011 with HDFC Bank .
Mobile financial services is a growing market in India as it leverages on the proliferation of mobile services and low-cost handsets to reach out to the significant under-banked population. The variety of service providers such as mobile wallet provider Beam , which has more than 14mn customers, Bharti Airtel and Loop Mobile has also helped to drive adoption. The potential also extends to other emerging markets in Asia . For example, the number of mobile banking accounts in Pakistan increased by 156% year-on-year to 1.4mn in end-June 2012, and the total value of the 28mn transactions in Q212 reached PKR115bn (US$1.2bn) ( see our online service, April 16, 'Mobile Banking: Further Room For Growth' ). We are also seeing similar trends in other regions such as Paraguay in Latin America ( see 'MFS Realising Its Potential', April 18 ).
Vodafone 's M-Pesa service is available in Kenya, Tanzania, South Africa, Afghanistan, Qatar, Fiji and now India. As of end-December 2012, Vodafone had 17.3mn active M-Pesa user s, up from 14.4mn at March 2012 . The operator also noted that its 14.4mn M-Pesa customers at March 2012 transferred (person-to-person) GBP600mn (US$917mn) a month. Meanwhile, Kenya's Safaricom reported 15.2mn M-Pesa customers, who generated KES10.4bn (US$124mn) in revenue in the half year ended September 2012. Additionally, M-Pesa contributed to 18% to the operator's total revenue.
Like Vodafone, Indian mobile market leader Bharti Airtel mobile financial service Airtel Money is present in Africa (15 countries) and India. While there are similarities between the African markets and India, we believe that the general awareness about the benefits of mobile financial services in the latter is significantly lower. Consequently, there is a need to raise awareness, particularly in rural India, and established a network of authorised agents. The Pakistani regulator noted that while there were 29,254 mobile banking agents compared with 9,399 traditional bank branches in the country, majority were located in urban cities, catering to the more-informed population.