The Cellular Operators Association of India (COAI) has expressed its reservations regarding the Telecom Regulatory Authority of India’s (TRAI) recommendations on the Framework for Service Authorisations under the Telecommunications Act, 2023. The association emphasizes the need to uphold the contractual nature of telecom licenses, which serve as legally binding agreements between the Department of Telecommunications (DoT) and telecom operators, outlining their rights, obligations, and operational parameters.
“The DoT (representing the Government) and the telecom operator are the two signatories of the same. Therefore, the authorization process must continue to retain the contractual nature of the present licenses, as this will ensure uniformity, regulatory certainty and protection to investors who commit long-term capital to the sector. It may be pertinent to note that the TRAI’s recommendation that the Central Government should grant Service Authorization under Section 3(1) of the Telecommunications Act, 2024, instead of entering into an agreement with the entity, is without any valid justification and goes against the position of TSPs, while also undermining the current regime that has worked successfully for more than 3 decades – bringing enormous inflow of investments and growth in the sector,” said a statement from Lt Gen Dr SP Kochhar, Director General, COAI.
Furthermore, COAI notes that TRAI missed an opportunity to alleviate the industry’s burden by proposing essential financial reforms. “COAI has been actively advocating for Reduction in License Fee and had suggested the present rate be reduced from 3% to 0.5-1% and abolition of the USOF (Digital Bharat Nidhi) levy which is 5% of AGR. Moreover, we had also suggested for doing away of Performance Bank Guarantee (PBG), Financial Bank Guarantee (FBG) and Bank Guarantee for Spectrum Payments (prior to 2022 auction). However, the same has not been recommended by TRAI,” added Lt Gen Dr SP Kochhar.
Another significant concern for COAI is the exclusion of Over-The-Top (OTT) Communication Services from the new authorization framework. He further stated: “Our concern that OTT Communication Services were excluded under the new authorization as Access Service is a great concern as this omission perpetuates an uneven competitive landscape, as the Telecom Service Providers (TSPs) continue to bear the weight of extensive compliance and security requirements. Such services are also not subject to any regulatory oversight on critical issues like spam prevention, despite their growing role as alternatives to conventional telecommunications services. OTT Communication Service Providers remain largely unregulated, raising questions not only about market fairness and regulatory consistency in the rapidly evolving digital communications sector but also about national security and customer privacy.”
Additionally, COAI according to Lt Gen Dr SP Kochhar, is also troubled by the expanded scope granted to Internet Service Providers (ISPs) under the new authorization framework. The association warns that the proposed enhancements would unfairly disadvantage existing Access and National Long Distance (NLD) operators who have made substantial financial investments and met stringent eligibility criteria to secure their market positions.
Lt Gen Dr SP Kochhar, urged to the Indian Government: ”We believe that addressing these concerns is crucial for fostering a healthy and robust environment for TSPs and the sector as a whole. COAI looks forward to engaging closely with the Government to facilitate discussions and amicable resolutions, ensuring the continued growth and motivation of this empowering sector in India.”
