CELLED Phones

New Mobile Regulations spell doom for growth in the North East

The growing cell phone industry has witnessed a sudden hurdle with the Department of Telecom (DOT) of the Government of India slapping on new regulations. These regulations which are already in vogue in Jammu and Kashmir are now being applied to two telecom circles of Assam and the North East.

Northeast circle comprises of six Northeastern states including Meghalaya, Manipur, Arunachal Pradesh, Mizoram, Tripura and Nagaland. Already in October fresh mobile connections are down by over 50 percent. These regulations are intended to curb the terrorist activity across the region. In a normal month, as many as 30,000 new activations happen a day in these states.

Under the new regulation, mobile operators have to re-verify the subscribers, which according to industry sources means a cost of several crores on the shoulders of the operators besides the gigantic task of verifying over 2 crore subscribers.

The DOT regulation provides a new set of documents for mobile connection and re-verification. These documents include passport, arms license, diving license, ID card issued by the Election Commission.

Prior to this regulation, address with photo issued by MP/ MLA group-A gazetted officer on an official letterhead, certificate of address with photo from a government recognized educational institution (for students only), photo id card issued by village panchayat, caste and domicile certificate were accepted.

According to the new norms, special camps for re-verification may also be organised by the service provider after notification of the venues and dates in advance. Each subscriber shall submit four copies of his /her photograph at the time of re-verification and the service provider shall compare the photograph with the subscriber.

The service provider is required to provide a new machine numbered customer acquisition form (CAF) in respect to each subscriber. A daily list of re-verified prepaid mobile telephone subscribers shall be sent to the state police and TERM cell. Similar exercise will be performed in the case of new subscribers.

In the case of multiple connections, no individual subscriber may subscribe to more than one mobile telephone connection.

According to operators, this will lead to complete chaos. Not many people remember the person who was the introducer. Industry insiders claim, “Postal and courier cost will add to the operational cost. In J&K the subscriber base is low so this succeeded. Our new business will suffer and all our manpower will be deployed for this purpose.”

Business of franchisee and multi brand outlets will be affected. A large volume of business comes from franchise and those will be affected.

Industry sources claim that, “It will be difficult to survive as we have to shell out crores of rupees to implement these rules. Already a re-verification process is on according to DOT notification issued in September last year. There is some interpretation problem in the new rules. Mobile telephony in the region is less than the national average and the expansion story of mobiles has come to a halt.”

It has been decided to extend the security safeguards applicable to the J&K service area to Assam and the North East on an experimental basis for six months with immediate effect.

Sources in the intelligence wing added, “Cell phones are used extensively by militant organisations in the region. It has also been noticed that the implementation process for obtaining mobile connections is very lax. There are several instances when, during operations, security forces have recovered hundreds of SIM cards from a militant. In a couple of operations, the Assam police has recovered around 1200 SIM cards from a militant.”

With the application of these norms, rural expansion of mobile companies will be severely affected. Presently 30 to 40 percent of the business of these companies is coming from rural areas.

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 ID. Several outlets have refused to sign such an agreement.

According to the DOT letter dated 20.10.2010, the re-verification of prepaid subscribers as a precondition to recharging is waived off provided that the re-verification of all the pre paid subscribers is completed within three months from the date of issue of these instructions. After the expiry of three months, no recharge will be allowed for unverified connections. The re-verification process has to over by January next year.

With the issuance of revised guidelines, re-verification of the existing pre paid connections and sale of pre paid and post paid mobile connections shall be done at the service providers’ own outlet or at the outlet of its franchisee only and no such activity is allowed to be done by the retailers.

The service provider has to provide a notice at the outlets where it will state that the mobile number is not transferable, a maximum of six mobile connections (pre-paid and post paid) across the service providers can be purchased by the family members, misuse of mobile numbers if any is liable to be punished. Re-verification of existing pre-paid connections and sale of SIMs for pre paid and post paid connections will be available only at the company’s authorized outlets operated by the company itself or by the franchisee/distributor.

Old cases of pre paid connections having more than six connections are to be reviewed and restricted to six. In case of bulk connections to organization/company/ firm address of employees /staff members should be the residential address. Only those connections shall be treated as bulk connections where the organization/company/firm will pay the bills. If the connection is to be used by the employee for his own use, the same should be purchased by the employee himself.

Before appointment of franchises/vendors wef 22.02.2009, the service providers are required to seek clearance from TERM cell which will be based on the police verification. With the issuance of revised guidelines, activity of sale of mobile connections has been withdrawn from the retailers/vendors and therefore clearance is to be sought only for the franchisees which are involved in the selling of the mobile connections. Clearance is also sought for the franchisees appointed prior to 22nd of February, 2009. These instructions are to be adhered to strictly. Violation of this section will attract action against the service provider including cancellation of appointment of such franchisee which is appointed without seeking clearance from the TERM cell.

Mobile operators have already had a meeting with the North East MPs forum.

They have said, “We want to impress upon the government that the situation in J&K and the North East is not same. The subscriber base here is huge.”

An analyst informed that by implementing such security regulations the Government of India is contradicting its own stand. The government is claiming that there has been marked improvement in law and order in the region. If that is the case then what is the call for such strong regulations?

Sources pointed out that the floating population gets cell connections by producing their landlord’s electricity bill. With the new rules in place, it will difficult for such people to get cell phone connections. “The government is not recognizing the fact that the cell phone industry is the single largest employment provider in the region and around 12 lakh people are involved in it. Cell phones have helped in the mushrooming of several new businesses. The security agencies have taken the help of cell phones to curb several crimes. Cell phones have empowered the people,” they said.