The Department of Telecommunications (DoT) has raised concerns against Vodafone Idea (Vi) for allegedly providing mobile connections to corporate clients without adhering to the mandatory “know your customer” (KYC) procedures for end-users. This action is seen as a violation of India’s customer verification regulations aimed at preventing cyber fraud.
In a letter dated December 29, the DoT has instructed Vi to ensure strict compliance with the rules and disconnect all business connections that were activated without the KYC process since December 1, 2023, which was the deadline for implementing the customer verification rules.
Vi, though, claimed it is complying with DoT’s KYC rules. “We are in compliance with KYC guidelines prescribed by DoT from time to time,” a Vi spokesperson said. The telco, however, declined to comment on steps taken to address DoT’s latest concerns around corporate customer verification.
As per DoT’s instructions to telcos around customer verification, all business SIMs issued to any company must remain in a deactivated state. Subsequently, they can be activated by a telco only after the demographic details of the concerned end-users-captured through the KYC process-matches the details in the end-users list provided by the authorised representative of the company buying the business connections.
“It has come to the notice of this office that Vi is providing business connections without carrying out end-user KYC, even after December 1, 2023, and (is) activating the connections after taking an undertaking from the authorised signatory of a company, which is in violation of DoT’s instructions, dated August 31, 2023, around customer verification before enrolling them,” the telecom department said in its letter to Vi.
Corporate mobile users or business SIM holders’, typically, are postpaid, high-revenue generating customers for any telco. As per Vi’s website, the telco offers large dollops of data to business SIM card holders, ranging from 30 to 175 GB a month, unlimited calls as well as features such as mobile security, location-tracking of moving field assets and productivity tools like Google Workplace.
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Corporate customers are vital for cash-strapped Vi, which has been losing mobile users every month, unable to compete effectively on the mobile broadband turf with its bigger rivals, Reliance Jio and Bharti Airtel, shackled by its delayed fundraise. Analysts have warned that Vi’s customer losses could mount with Jio and Airtel set to launch 5G services nationally very shortly.
In its letter, DoT has also pointed out that Vi’s non-compliance of its August 2023 customer verification instructions was detected during pilots conducted in Mumbai on December 6 and December 12. “Vi is hereby instructed to strictly follow DoT instructions in true spirit and disconnect all business connections that were activated after December 1, 2023, without following the said instructions.”
In August 2023, the government had tightened the verification rules prior to customer onboarding for telcos to curb the menace of fake SIM cards and financial/cyber fraud. As part of these efforts, verification of SIM card dealers was made mandatory, the provision of bulk connections was discontinued and a new category of business connections was introduced. Subsequently, the government had extended the deadline for the implementation of its customer verification instructions to December 1, 2023, from the earlier October 1, after telcos sought more time to make changes in their respective IT systems.
