New turf, new tricks: Telcos chase the fintech dream

Indian telcos are transforming into fintech powerhouses, using their infrastructure and reach to drive inclusion and redefine digital finance.

- PRATIMA HARIGUNANI

There used to be a phrase—a one-horse town. It referred to a place so small and self-contained that a single horse could suffice for all transportation needs.

For a long time, telecom operators have resembled such towns—content, and perhaps even complacent, within the confines of the data and voice business. Then one day, the distant sound of carnival loudspeakers reaches them. It appears that every other town is heading to this festival, their horses galloping into a new and expansive arena. Hyperscalers, which were once focused solely on large enterprise technology, have now entered the fray. Neo-banks, unburdened by legacy systems, are plunging in with enthusiasm. Even e-commerce platforms and retailers are eager to test the waters. So, what might still be holding telcos back?

IN BRIEF

• Telcos are leveraging infrastructure and reach to enter fintech with offerings like wallets, UPI, and digital lending.

Players like Airtel and Jio have partnered with banks to offer credit and savings solutions via their apps and payment banks.

• Telecom-led fintech is reshaping financial inclusion by reaching unbanked users with USSD, mobile wallets, and sachet products.

Challenges include regulatory limits, financial know-how gaps, and competition from agile hyperscalers and fintech startups.

Despite missing early gains in UPI, telcos are well-positioned for the next wave of fintech, thanks to data, reach, and trust.

Evolving business models such as revenuesharing and embedded finance are helping telcos monetise fintech without becoming NBFCs.