Demonetization has affected everyone and it might have taken a bigger toll on mobile operators as prepaid recharges have dropped drastically since November 8.
Much of the mobile account recharges are paid for in cash, following demonetization and short supply of cash, it has especially instigated people to cut down on mobile recharge as they are unsure on how long the cash crunch situation will last.
While the government has stopped the over-the-counter exchange of the banned notes with immediate effect from last night, the Ministry of Finance, however, has announced that consumers with pre-paid connections will still be able to recharge their mobile currency for a maximum of Rs 500 each using older currency notes till December 15.
As such, the older Rs 500 notes will be accepted for another 20 days.
COAI, Cellular Operators Association of India on Thursday expressed that the government's decision to allow old Rs. 500 notes to be used for prepaid mobile recharges will help in solving the cash crunch situation faced by consumers and will allow them to continue using mobile services without any interruption.
Commentating on the same, COAI Director General, Rajan Mathews stated that they were delighted as the government had listened to their request in the interest of the consumers, and now they could continue to top up and use mobile services.
As such, last week COAI had requested the Telecom Department to take some initiative in solving the hardships being faced by ordinary citizens in obtaining such services due to difficulties of obtaining replacement currency.
Other telecom service providers had also approached the telecom ministry to relax demonetisation rules for their retailers and distributors, such that they could accept older Rs 500 and Rs 1,000 currency notes just like petrol pumps and utilities, making the case for telecom as an essential service.
The government has partially accepted telcos' request.
COAI believes that the permission extended to TSPs will go a long way in ameliorating citizen's difficulties relating to obtaining and using communication services.
While the prepaid segment accounts for over 90 percent of the Indian mobile market, the government's decision has come as a relief for many.
In essence, old Rs. 500 notes can be used to top up prepaid mobile phones, util December 15.