Telcos oppose 'service authorisation', see threat of regulatory uncertainty

NEW DELHI/KOLKATA: India’s top telecom operators decried the sector regulator’s suggestion that the government grant service authorisation to companies offering communication services instead of entering into a contractual agreement, warning that such a move would ring in regulatory uncertainty and undermine investor confidence.

All three private carriers — Reliance Jio, Bharti Airtel and Vodafone Idea (Vi) — unanimously stated during a consultation process of the regulator that the current practice of contractual arrangement should continue as it provides regulatory certainty and predictability. But the Telecom Regulatory Authority of India ( Trai) has not agreed to the demand of telcos.

Trai has suggested that the Centre grant service authorisation under Section 3(1) of the Telecommunications Act, 2023, instead of entering into an agreement. It also said the rules for service authorisation should be prescribed separately under the Telecommunications Act.

In such a scenario, a top telco executive wondered how a company would have any clarity on what the rules would be in future. “An agreement now is binding, and telcos can challenge if the government unilaterally changes something, but that won’t be possible in the new (proposed) framework.”

Industry executives added that when operators get a licence, all terms and conditions are specified, which allows them to plan their future roadmap. So even if the government wishes to change certain terms and conditions, it cannot do so unilaterally, and a notice must be given to the telcos first.


On Wednesday, Trai recommended a complete overhaul of the licensing regime, suggesting a unified authorisation to offer all kinds of telecom services from mobile and internet to international calls across the country, and three broad categories of service — main, auxiliary and captive. The proposed unified authorisation would enable an entity to offer all kinds of telecom services including mobile, internet, landline, national long distance, international long distance, satellite and machine-to-machine (M2M) across the country.

Industry veteran Parag Kar, former vice president (government affairs) at Qualcomm India, said Trai’s recommendations to transition from a licensing to an authorisation regime — aligned with the new Telecommunications Act’s shift from contract-based licensing to an approval-based authorisation — are aimed at modernising telecom regulations.

But he feels that despite good intentions, the suggested changes fall short in practice. “This is since compliance demands remain unchanged under the proposed new regime, and the anticipated reduction in paperwork has little effect in a saturated market with no significant new entrants.”

Industry executives said Trai’s suggestions offered no meaningful benefits for service providers as there is no real change in the allotment mechanism of critical bottleneck resources such as spectrum or mobile/landline numbering. “Entrenched issues like circle-based spectrum assignments persist, leaving operational efficiencies unimproved. These reforms fail to make a meaningful impact, maintaining the status quo," said Kar.

The telecom industry, on its part, has backed the push for a unified authorisation to offer all kinds of services. But experts stressed that compliance issues remain circle-wise.

“What difference would it make to telcos even if they take the unified authorisation. All different compliances would continue to be given circle-wise, so the burden remains the same for telcos,” the first executive said.

While Trai has outlined authorisation terms and conditions for telecom operators, satellite players, internet service providers and M2M among others, over-the-top (OTT) has been kept out of the mechanism.