Telecom companies can save over Rs 1,000 crore every year, provided they use Aadhaar authentication to verify identity and address of their prospective subscribers, says a study by the Unique Identification of Authority of India (UIDAI).
According to the study, Leveraging Aadhaar in Telecom Sector, discussions with industry experts indicate that paperless know your customer (KYC) using Aadhaar can save substantially per subscriber by avoiding TERM fines and paper-based backend processes. TERM fines are imposed on operators who fail to verify subscribers’ identity and address as per prescribed norms.
According to the annual report of department of telecom for 2010–2011, the Telecom Enforcement Resource and Monitoring cell imposed a penalty of Rs 700 crore on telecom operators related to subscriber verification. The estimate indicates the operators are issuing over 30 million mobile phone connections every month. UIDAI is implementing the Aadhaar project under which every resident of the country would be given a unique number.
Aadhaar authentication is an online real-time service and only responds with a yes or no. The authority has been entrusted the task of enrolling 60 million residents. It has enrolled 20 million residents.