New Voluntary eKYC Aadhaar Based Verification Process to Make Customer Acquisition Faster and Cheaper for Telcos

After stopping the telcos from using Aadhaar directly as a verification process, DoT has brought a new notification which will allow for easy customer acquisition

Highlights
  • The consumer acquisition costs will come down for telcos
  • The customers will be able to verify themselves faster

A new notification which allows for voluntary Aadhaar based-digital verification will help the top three telecom companies of India, Reliance Jio, Bharti Airtel and Vodafone Idea in speeding up their subscriber addition process, industry executives said. The industry experts also added that this would bring down the costs of user acquisition as well for these companies, especially in the rural regions. In their words, Aadhaar would be a full proof authentication mechanism as compared to the QR codes which were being used to verify IDs before giving away SIMs.

new-digital-kyc-process

Better Option Than QR Codes and Physical ID Proofs

Hetal Gandhi, director of research at Crisil India told ET Telecom, “Aadhaar-based customer verification will boost customer acquisitions for big telcos, particularly in rural markets where a bulk of the new customer adds are happening now.” She added to her words, “Aadhaar will be a simpler and stronger authentication mechanism for telcos to validate prepaid customers, particularly in rural markets before disbursing handset subsidy.”

It is worth noting that Mukesh Ambani led telecom operator, Reliance Jio Infocomm’s 4G feature phone, JioPhone has become a success in the rural regions and is the reason why many subscribers have joined the 4G bandwagon. Speaking about the faster verification process based on Aadhaar, Rajan Matthews, director of Cellular Operators Association of India, which represents big telcos like Vodafone Idea, Bharti Airtel and Reliance Jio said that he expects “a definite increase in the pace of subscriber adds if more folks voluntarily opt for the Aadhaar-based verification system following the latest ordinance”.

eKYC Process Made Voluntary for Consumers

It was last week when the Cabinet issued an ordinance which allows consumers to voluntarily use Aadhaar to complete the eKYC process while opening a bank account or buying a new connection. Rajiv Sharma, co-head of research, SBICap Securities said that since the process of verification via Aadhaar is a one-shot process, it will make the customer onboarding process fast. It will also be much better than the process which involved the mixing of the QR code and the physical ID proof. He also added that there might be a slight dip in the costs of customer acquisition as the Aadhaar verification process catches up nationally.

To recall, last year the Department of Telecommunications (DoT) had barred Aadhaar based mobile verification process with an order from the Supreme Court which came as a shocking move for these telecom operators. The companies were widely using the Aadhaar based verification process for rapid customer acquisition. Post the step, DoT had come up with an alternative verification process, but it involved the use of QR code and a blend of physical ID proofs.

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Chakri is a go-to guy for your next smartphone recommendation. Back in his engineering days, he used to play with smartphones by installing custom ROMs and that passion got him into the tech industry. He still goes nuts about a smartphone knocking his door for review. Currently managing everything at Telecom Talk, Chakri is trying to master PUBG Mobile in his free time.

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dragonmonk

All the private companies are salivating again at the possibility of data gathering/linking again! I wonder what the hurry is in passing this as an ordinance instead of waiting for the next session of parliament (bill was passed in only one house out of the two in the parliament). There must have been quite a few private companies behind this decision. Wonder if this ordinance will stand the scrutiny of the Supreme Court if challenged.

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