Aadhaar, A possible nightmare for the telecom sector

India is progressively heading towards Digital Economy. The current move of government to make Aadhaar-based e-KYC (know your customer) mandatory for mobile phone connections, is an another stepping stone towards the journey of digitalization.

A week back, the Department of Telecommunications issued a notification, directing all phone service providers to re-verify details for all existing subscribers through Aadhaar-based e-KYC (Know Your Customer) process. They were told to complete the exercise by early next year.

This move will impact more than 100 crore mobile phone subscribers in the country, 90% of whom are prepaid card users. The process is likely to cost about ₹2,500 crore which will be borne by the service providers, according to industry body COAI.

According to industry experts, the mammoth verification exercise will be a costly affair and the process could cost at least Rs 1,000 crore at a time when companies are burdened with debt and fighting a tariff war. The move would be a big drag on the telcos, especially the older ones as most of their subscribers were signed up before the government allowed the Aadhaar-linked e-KYC verification process last August. Most subscriber additions after August won’t need to be re-verified.

New entrant Reliance Jio Infocomm will be the least hit as most of its 100 million users have come on board via the Aadhaar-based e-KYC since it started services in early September.

However, discussions with industry experts indicate that paperless KYC using Aadhaar can save substantially per subscriber by avoiding TERM fines and paper based backend processes. Telecom operators are issuing over 30 million SIM connections every month that require KYC. Adopting Aadhaar authentication can result in substantial annual savings for the industry.

Therefore, to be the part of ongoing Digital Revolution, telecom sector has no choice but to be ready. Wide and easy access to communication has raised the potential use of the telecom connections for anti-national activities. This necessitates that connections must be traceable and issued only after proper verification of the subscriber.

Aadhaar is definitely a move forward and is requisite to check cyber threats.  Since, Aadhaar has your biometric data like fingerprint and retina scans, it can very well help security agencies to track criminal suspects present around the crime scene, and expedite the investigation process. The benefits of Aadhaar far outweigh the risks.

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