In a major step towards achieving this objective, the Department of Telecommunications, Ministry of Communications, Government of India, today issued a series of orders simplifying the KYC processes and thereby initiating the telecom reforms announced by the Cabinet on 15.09.2021.
Presently, a subscriber has to undergo KYC process which entails visit to the Point of Sale along with the original documents of identity and address as proof for obtaining new mobile connection or conversion of mobile connection from Prepaid to Postpaid or vice-versa.
Online service delivery has become an acceptable norm in the recent past and most of the customer services are being offered through internet with OTP authentication. Contactless services in the COVID era needs to be promoted for subscriber convenience and also for ease of doing business.
Customer consent has been made compulsory in case the Aadhaar is being used and demographic details are being obtained electronically from UIDAI.
Accordingly, following orders for immediate implementation have been issued by DoT to implement contactless, customer centric and secured KYC processes: –
- Aadhaar based e-KYC
Aadhaar based e-KYC process has been re-introduced for issuing of new mobile connections. Telecom Service Providers will be charged Rs. 1/- per customer authentication by the UIDAI. This is a complete paperless and digital process wherein the demographic details along with picture of the customer is received online by the Telecom Service Providers (TSPs) from the UIDAI.
In this process, the issuing of mobile connection to the customers is done through an App/Portal based online process wherein a customer can apply for mobile connection sitting at home/office and gets the SIM delivered at his door step using documents electronically verified by UIDAI or DigiLocker.
- OTP based conversion of mobile connection from Prepaid to Postpaid and vice-versa
The implementation of OTP based conversion process enables a subscriber to convert his mobile connection from Prepaid to Postpaid and vice-versa sitting at home/office via OTP based authentication.
Detailed orders have been uploaded on the DoT website(Link-https://dot.gov.in/relatedlinks/telecom-reforms-2021).
Nine structural reforms and Five procedural reforms plus relief measures for the Telecom Service Providers are as below:
- Rationalization of Adjusted Gross Revenue: Non-telecom revenue will be excluded on prospective basis from the definition of AGR.
- Bank Guarantees (BGs) rationalized: Huge reduction in BG requirements (80%) against License Fee (LF) and other similar Levies. No requirements for multiple BGs in different Licenced Service Areas (LSAs) regions in the country. Instead, One BG will be enough.
- Interest rates rationalized/ Penalties removed: From 1st October, 2021, Delayed payments of License Fee (LF)/Spectrum Usage Charge (SUC) will attract interest rate of SBI’s MCLR plus 2% instead of MCLR plus 4%; interest compounded annually instead of monthly; penalty and interest on penalty removed.
- For Auctions held henceforth, no BGs will be required to secure instalment payments. Industry has matured and the past practice of BG is no longer required.
- Spectrum Tenure: In future Auctions, tenure of spectrum increased from 20 to 30 years.
- Surrender of spectrum will be permitted after 10 years for spectrum acquired in the future auctions.
- No Spectrum Usage Charge (SUC) for spectrum acquired in future spectrum auctions.
- Spectrum sharing encouraged- additional SUC of 0.5% for spectrum sharing removed.
- To encourage investment, 100% Foreign Direct Investment (FDI) under automatic route permitted in Telecom Sector. All safeguards will apply.
- Auction calendar fixed – Spectrum auctions to be normally held in the last quarter of every financial year.
- Ease of doing business promoted – cumbersome requirement of licenses under 1953 Customs Notification for wireless equipment removed. Replaced with self-declaration.
- Know Your Customers (KYC) reforms: Self-KYC (App based) permitted. E-KYC rate revised to only One Rupee. Shifting from Prepaid to Post-paid and vice-versa will not require fresh KYC.
- Paper Customer Acquisition Forms (CAF) will be replaced by digital storage of data. Nearly 300-400 crore paper CAFs lying in various warehouses of TSPs will not be required. Warehouse audit of CAF will not be required.
- SACFA clearance for telecom towers eased. DOT will accept data on a portal based on self-declaration basis. Portals of other Agencies (such as Civil Aviation) will be linked with DOT Portal.
Addressing Liquidity requirements of Telecom Service Providers
The Cabinet approved the following for all the Telecom Service Providers (TSPs):
- Moratorium/Deferment of upto four years in annual payments of dues arising out of the AGR judgement, with however, by protecting the Net Present Value (NPV) of the due amounts being protected.
- Moratorium/Deferment on due payments of spectrum purchased in past auctions (excluding the auction of 2021) for upto four years with NPV protected at the interest rate stipulated in the respective auctions.
- Option to the TSPs to pay the interest amount arising due to the said deferment of payment by way of equity.
- At the option of the Government, to convert the due amount pertaining to the said deferred payment by way of equity at the end of the Moratorium/Deferment period, guidelines for which will be finalized by the Ministry of Finance.
The above will be applicable for all TSPs and will provide relief by easing liquidity and cash flow. This will also help various banks having substantial exposure to the Telecom sector.
The Ministry of Electronics & Information Technology, announced in a press interaction today that Department of Telecommunication has further liberalized the guidelines for Other Service Providers (OSPs). These entities are business process outsourcing (BPO) organisations giving Voice based services, in India and abroad. The Guidelines issued today further liberalized the special dispensation given to OSPs in addition to the major measures already announced and implemented in November, 2020.
The main features of the liberalised guidelines announced today are :-
- Distinction between Domestic and International OSPs has been removed. A BPO centre with common Telecom resources will now be able to serve customers located worldwide including in India.
- EPABX (Electronic Private Automatic Branch Exchange) of the OSP can be located anywhere in the world. OSPs apart from utilising EPABX services of the Telecom Service Providers can also locate their EPABX at third Party Data Centres in India.
- With the removal of the distinction between Domestic and International OSP centres, the interconnectivity between all types of OSP centres is now permitted.
- Remote Agents of OSP can now connect directly with the Centralised EPABX/ EPABX of the OSP/ EPABX of the customer using any technology including Broadband over wireline/ wireless.
- No restriction for data interconnectivity between any OSP centres of same company or group company or any unrelated company.
- It may be recalled that DoT has already exempted Data Based Services from the OSP regulations. In addition, the regulations exempted OSPs from requirement of any registration. Also, no Bank Guarantees were to be furnished. Work from Home and Work from Anywhere was also permitted.
- Penalties for violations were removed altogether reaffirming the trust Government has in business.
- Further liberalization of Guidelines today will provide a big fillip for growth of OSP industry in India. This will create immense opportunities, income and employment in India.