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Aadhaar-Based E-KYC To Boost Customer Acquisition For Telcos

The Narendra Modi government last Saturday promulgated an ordinance that allows voluntary use of Aadhaar as ID and address proof for obtaining new mobile connection and opening bank account. Analysts believe this ordinance is likely to hasten customer acquisition for the big 3 telcos in the rural market, where most of the new connections are being given. The ET citing analysts and industry executives said Aadhaar-based e-KYC will also reduce customer acquisition cost for these telcos.

According to analysts, Aadhaar would be a simple and more foolproof authentication mechanism than the QR code-based verification of new users before selling mobile connections.

“Aadhaar-based customer verification will boost customer acquisitions for big telcos, particularly in rural markets where bulk of the new customer adds are happening now,” Hetal Gandhi, director (research) at Crisil India, told ET.

Analysts believe the Aadhaar-based verification will also benefit telcos subsidising 4G handsets.  “Aadhaar will be a simpler and stronger authentication mechanism for telcos to validate prepaid customers, particularly in rural markets before disbursing handset subsidy,” Gandhi told the business daily.

Mukesh Ambani-led Reliance Jio, which has heavily subsidised its 4G-VoLTE feature phone- JioPhone-for faster penetration in the rural market, is likely to benefit the most for the ordinance, analysts say.

President Ram Nath Kovind Saturday gave his assent to the ordinance. The ordinance was brought in as the Rajya Sabha could not approve a Bill after its passage by the Lok Sabha.―Times Now

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