Telecom Watchdog TRAI to Restructure Licensing and Regulatory Regime

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Industry Outlook Team | Monday, 31 August 2020

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In a bid to foster innovation and attract new investments, India's telecom regulator is aggressively working on reforming the licensing regime and would soon release a consultation paper, as a part of ease of doing business in the sector. "Currently, we are working on reforming the licensing and regulatory regime to catalyse investments and innovation and promote ease of doing business. For this, the consultation paper will be released shortly," said Ram Sewak Sharma, chairman, Telecom Regulatory Authority of India, as per a report by Economic Times.

The sector watchdog has previously recommended a slew of measures to the Department of Telecommunications (DoT) such as the reduction in levies, and the upcoming initiative is aimed to further improve the industry's health in line with the national policy unveiled in 2018. TRAI had earlier presented its views to the department on rationalisation of adjusted gross revenue (AGR), reduction of license fee,

spectrum usage charge (SUC) and Universal Service Obligation Fund (USOF) contribution, and flexible payment options for auctioned spectrum.

"The authority through its letters has reiterated that DoT may favourably consider those recommendations as they would help in minimising the financial stress of the telecom companies," the top official said. In January 2015, the regulator had recommended that the component of the USO levy should be reduced from the present 5 percent to 3 percent of the AGR. With this reduction, the applicable uniform rate of licence fee would become 6 percent, from the present 8 percent of AGR, according to TRAI, while the 3 percent of license fee (LF) that directly accrues to the government would not change.

“It will enable them (telcos) to offer quality services to consumers at affordable prices and facilitate digitisation of the economy as well as the proliferation of telecom services in rural and remote areas to achieve the mission of Digital India," Sharma said. The watchdog also recommended that the spectrum acquired through an auction or trading for which a telecom operator has paid the prescribed market value to the government should not be added to any existing spectrum holdings for determining the applicable slab rate.

TRAI is also currently working on promoting broadband connectivity and enhancing speed on the back of strategies recognised in the National Digital Communications Policy (NDCP) 2018, which it believes should be converted into the operational roadmap. Following the national policy objectives, the sector watchdog has received a few references from the department that prompted it to set forth the guidelines for the transfer and merger of telecom licenses to simplify compliances and suggested strengthening the satellite communication technologies in India. (Source: Economic Times)