Question 1

Why should telcos pivot to financial services now?

Accepted Answer

Core retail telco revenues in Australia grew at a stagnant 1.7% CAGR between 2009 and 2018, necessitating a move into high-growth adjacencies. Global fintech investment reached US$111.8 billion in 2018, following a five-year CAGR of 42.7%, offering a significantly more aggressive growth profile than the 2% CAGR forecast for the Australian telco market.

Question 2

Is there genuine consumer demand for telco-led banking in Australia?

Accepted Answer

Market sentiment is highly favorable for disruption, as 75% of Australian consumers believe incumbent banks hold excessive market power. Specifically, over 60% of the 18-44 age demographic are willing to trial new fintech products, providing a clear target for telcos to leverage their existing distribution networks.

Question 3

What does a successful telco fintech strategy look like?

Accepted Answer

Global leaders are building 'walled garden' ecosystems that integrate mobile wallets and banking to drive retention, such as Orange Money which scaled to 30 million users in Africa and the Middle East. Strategic investment is also a key lever, evidenced by Axiata committing US$200 million to digital ventures since 2012 to rapidly build internal capabilities.

Question 4

What are the risks of maintaining the status quo in the ANZ market?

Accepted Answer

While ANZ telcos have remained cautious, they risk ceding a high-growth sector to agile start-ups and incumbent banks that are already navigating a US$111.8 billion global investment landscape. Failure to diversify beyond core connectivity will leave operators exposed to the moderating 2% CAGR projected for the domestic telco sector over the next five years.

‘Is Orange the new Bank?’ Telcos and Fintech

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