According to ‘Leveraging Aadhaar in Telecom Sector’, the first version of a study conducted by the Unique Identification Authority of India (UIDAI), the telecom companies in India can save to the tune of Rs 1000 crore per annum by using the identification details provided by the Aadhaar Authentication.
The study says, “Adopting Aadhaar authentication can result in substantial savings of over Rs 1,000 crore annually for the telecom industry.” The Aadhaar card can be used a verification tool for the identification of the details of the telecom subscribers.
The Aadhaar authentication is an online real time service which responds to the queries with a yes or no, making it simple to authenticate details without complex processing and paper work.
The UIDAI is responsible for executing the project Aadhaar to ensure that every resident of India is issued a Unique Identification Number, which can be used for identification purposes. UIDAI has enrolled twenty million citizens so far, with the target of phase one being close to sixty million.
Stating the crux of the problem, the study said, “Subscribers are verified using know your customer (KYC) documentation, which requires submission of a proof of identify (POI) and proof of address (POA). Individuals lacking these documents get excluded from telecom services or resort to providing fake documents to get access to services.”
In 2010-11, a penalty of Rs 700 crore was imposed by the TERM cell on the telecom operators in India for subscriber verification.
To save the millions spent on penalties, the study says, “Aadhaar Authentication can change this eco-system making Telecom KYC stronger, cheaper and paperless. The process is incentive compatible enabling benefits for all parties involved including the resident, retailers, telecom operators and the government.”
The study estimates that over 30 million SIM connections are issued every month in the country. The usage of Aadhaar authentication can help in savings of over Rs 1000 crore annually for the sector.
On deploying Aadhaar enabled applications in retail outlets, the study says, “There are over one million retailers selling telecom services in India. New revenue streams can be created for the small retailer by equipping them with Aadhaar enabled terminals.”
The study suggests that Aadhaar enabled terminals would be capable of handling multiple applications and work towards creating multiple channels of revenues. It says, “With a number of e-Governance and other applications on the horizon, Aadhaar terminals at retailers must be capable to run multiple applications. This will create a new eco-system that will deliver new revenue streams for the small retailer.”