Payment bank facility will help reduce subscriber churn for the operators: Experts

By August 31st, 2015 AT 8:49 PM

With telecom operators like Vodafone and Bharti Airtel receiving nod for payment bank from RBI, experts suggest that the subscriber churn of these operators would reduce at a considerable rate. This is because the subscribers of these operators who opt for banking service are unlikely to switch the service provider as they enroll for banking service.

payment-bank-operators

The banking service, hence, proves as a new means for the telecom operators to connect with the customers. With full MNP turning into realty, subscriber churning was a biggest problem that operators face. When the customer begin dealing with an operator as a banking partner, they are unlikely to shift to new providers. However, those operators with no banking service would continue to see some churning.

The RBI gave nod to 11 entities to accept payments from customers, including India Post, Reliance Industries Ltd., Aditya Birla Nuvo, Tech Mahindra, Sun Pharma, National Securities Depository Ltd., Cholamandalam Distribution Services Ltd., Fino PayTech Ltd. and Paytm, besides Vodafone and Bharti Airtel. They can accept remittances and deposits, but cannot provide loan services.

The rating agency CRISIL has predicted that the payment banks’ contribution to the revenues of the telecom operators is likely to remain at less than 1% at least for next 4 to 5 years. Moreover, around 40 percent of India’s population remains unbanked.

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