Financial Daily from THE HINDU group of publications
Tuesday, Feb 17, 2004
To outsource bill collection Reliance Infocomm begins talks with India Post
Bangalore , Feb. 16
RELIANCE Infocomm has begun negotiations with India Post for address verification and collection of bills from its mobile subscribers throughout the country.
The company, which provides the mobile service on the CDMA (code division multiple access) platform, has a subscriber base in excess of six million across the country.Official sources said, "We are still discussing the modalities." Reliance Infocomm is keen to outsource bill collection to India Post. This is in view of India Post's network of 1.5 lakh offices spread across the most remote regions.
This kind of outsourcing would also help minimise collection and administrative costs. At the same time, such a mechanism was also intended for subscriber convenience, especially those located in the smaller towns and rural areas, the sources said. Reliance Infocomm when contacted, declined to comment on the subject.
With unified licensing regime in place for telecom service providers, the company's subscriber base growth rate is expected to accelerate. Most of this growth, though, is likely to be powered by the non-metro cities and smaller towns. Accordingly, the sources said, Reliance Infocomm felt the need to simplify the billing process in these regions.
The process would allow subscribers to deposit their bills with any of the post offices in the country. Indian Post, in turn, would forward the cheques directly to the service provider.
India Post, however, was not prepared to collect the bills in cash directly from the subscribers. Although the statute permits some agency services by it, collection of telephone bills on behalf of private corporate enterprises was not among them, the sources said.
Such activity amounted to a Government department providing agency services to the private corporate sector. Therefore, these functions would require the clearance of the Ministry of Law.
Besides, such activities could be done only on a tripartite basis involving the banking sector since it would involve cash transfers, they said.
An alternative that was also being worked out was locating drop boxes in the post offices itself around the country.
But the sources said, Reliance Infocomm favoured the collection of bills by the department and forwarding the same to the company, till such time Government approved direct collection of bills.
In fact, India Post already collects fixed line bills of Bharat Sanchar Nigam Ltd. This is, however, for the first time that it would be collecting bills on behalf of a private provider.
The only activity that it had so far undertaken for the private sector was distribution of prepaid cards for Spice Telecom, who is the mobile licensee for the Karnataka circle. Consequently, this activity was restricted only within the licence area.
Further, the sources said that Reliance Infocomm was also discussing the possibility of simplifying the verification process for subscribers, through India Post.
This process involved using its army of postmen for verification of subscriber addresses.
These services of India Post would essentially be fee-based. The fee/commissions, the sources said, were still in the process of being finalised.
But such activities would help improve the non-core income of India Post and help to reduce its dependence on budgetary support for bridging revenue deficit.
Its non-core income is currently about 40 per cent of gross revenues. The annual revenue deficit of the postal department is currently in the region of about Rs 1,500 crore.
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