Telcos take a hit in Northeast India

New Subscribers Stay Away

Guwahati, Oct 9 : The country’s top mobile phone companies like Reliance Communications, Bharti Airtel, Maxis-owned Aircel, Tata Teleservices, Vodafone Essar and Idea Cellular have seen a combined 70% crash in new customer activations across Assam and North East in the first week of October after the government extended the Jammu & Kashmir customer verification drill to these states on heightened security concerns.

The security safeguards for the J&K service area will be applicable to Assam and North East on an experimental basis for six months.

The biggest blow has come from the 15,000-odd multi-brand mobile stores who’ve refused to play ball with the telcos. Under the new regulations, all multi-brand mobile outlets in Assam and the northeastern states must give a legal undertaking to the telcos accepting full responsibility for acceptance and verification of all pre-activation documents/photo IDs. A majority have refused to comply, affecting new customer acquisitions in the region.

In a normal month, as many as 30,000 new activations a day happen in these states. That crashed to below 10,000 in the first week of October and is likely to get worse when verification intensifies and state-owned BSNL also implements the new rules.

Mobile phone companies have a clutch of dedicated customer outlets of their own, but the outlets remain largely confined to urban pockets. The suburban areas and the vast Assam and northeastern countryside do not have the distribution reach and rely largely on the legion of multi-brand mobile stores scattered across the region. Such stores are important for the telecom companies because real growth is happening beyond the urban zones. Since the telecom department has made it mandatory for mobile phone companies to sell new mobile connections in this region only through authorised franchisees, they have no choice but to ink legal business relationship agreements with all multi-brand retail stores.

“A majority of the multi-brand mobile retail points are unwilling to enter into legal business relationship agreements with the telcos as they are averse to taking responsibility for acceptance and verification of all pre-activation documents in the region,” said an RCOM official with direct knowledge of the matter.

“This has resulted in a massive decline in new activations in Assam and across the Northeast in the first week of October. The decline is nearly 60% to 70%. We’ve communicated this to the government and hope the DoT will come up with a solution,” the official, who did not want to be named, said.

Sources at Bharti Airtel and Aircel also said that many multi-brand telecom stores are yet to sign business relationship agreements.

“We are doing our best to convince them that this is a DoT direction in step with the new telecom security regulations. We fear it will take some time for these outlets to understand the gravity of the exercise,” an official said.

Under the new DoT rules, people in Assam and Northeast will not be able to buy new cellphone connections on the basis of electricity bills, caste/domicile certificates or even photo-IDs attested by MPs/MLAs and Group A officers. Instead, they will have to furnish a passport, an arms licence, a CGHS (central government health service) card, a driving licence, PAN card or a voter ID issued by the Election Commission.