Fintech
Your SIM card is a new weapon in the fintech war of Airtel and Jio
At a time when Indian fintechs are struggling with profitability, telecom giant Bharti Airtel has two thriving ventures – a payments bank and a new financial entity – aimed directly at rival Reliance Jio’s latest power play, Jio Financial Services.
While Airtel Payments Bank, founded seven years ago, is one of the three profitable payments banks in India, Airtel Finance’s service loans, started almost a year ago, are worth Rs 2,500 crore ($300 million). That’s about a fifth of what its more established competitors Finbox and Spocto make.
Better still, Airtel Finance is a high-margin software-as-a-service product managed by a lean team of nearly 30 data experts stationed in Gurugram, The Ken he learned. They are led by VP-level executives who have been hired from fintechs like Paytm. This is one of the reasons why almost all of its revenue goes directly to profits.
“The annualized profit is already Rs 100 crore (US$12 million),” a senior Bharti Airtel executive said. They and three others named in this story declined to be named because they are not authorized to speak to the media.
In an earnings call on May 15, Gopal Vittal, CEO and MD, Bharti Airtel, said, “Airtel Finance is shaping up really well. It served 400,000 automotive and loan products in fiscal 24 [the year ended March].”
On the other hand, Airtel Payments Bank reported its highest ever annual revenue rate of Rs 2,100 crore (US$252 million) for the financial year March 2024 and also increased its deposits by 50% over levels of a year ago. The bank adds nearly a million new customers every month.
That Airtel and Jio are constantly trying to outdo each other is nothing new. The latter has been leading the competition for about two years now.
Despite being around for much longer than its rival, Airtel’s overall subscriber base is still 76 million lower than Jio’s. In the March quarter alone, the Reliance subsidiary added around two million more subscribers than Airtel.
