UTI bets on mobile phones to tap young clients

MUMBAI May 7 (Reuters) - UTI Asset Management is planning to launch a mobile phone-based platform to allow investors buy, sell or switch money into its products as India's oldest mutual fund aims to tap young and tech savvy investors, a top executive said.

The firm, which has about 10 million clients, has already started disseminating information on funds through mobile phones, a medium that it sees a growth driver in the future.

"We are right now in the testing phase," Jaideep Bhattacharya, chief marketing officer of UTI told Reuters, adding that the fund will launch the service in a couple of months, subject to regulatory approvals.

India is the world's fastest growing mobile phone market and is home to 392 million subscribers, second only to China, offering an opportunity to players like UTI to ease the distribution bottleneck that the Indian funds face now.

The 5.5 trillion rupees industry gets about three quarters of its assets from top 8 cities of the country, leaving much of the 71 percent of India's population in rural areas untapped.

The executive said a majority of investors in mutual funds had annual income of 500,000 rupees a year and with 70 percent of Indians less than 40 years of age and tech savvy, he expected mobile phones to emerge as a preferred medium of transaction.

"That is the only thing which you are carrying with you all the time. Whether it's going be banking, mutualfunds, insurance...all of it will be basically through mobile," he said. (Reporting by Nishant Kumar; editing by Ramya Venugopal)