The past year marked a turning point for the Indian telecom sector from a policy standpoint with the introduction of the Telecommunications Bill, 2023. This legislation represented a comprehensive overhaul of the country’s century-old telecom laws, rooted in the Indian Telegraph Act of 1885, the Wireless Telegraphy Act of 1933, and the Telegraph Wires (Unlawful Possession) Act of 1950. The new law consolidates regulations related to the development, expansion and operation of telecom services and networks, as well as the assignment of spectrum.
In another significant policy development, the government implemented the Digital Personal Data Protection Act, 2023 to safeguard users’ personal data in an era of escalating data usage. Further, a new space policy was introduced, outlining a comprehensive framework to support satellite communications. Meanwhile, the Telecom Regulatory Authority of India (TRAI) actively released several recommendations and consultation papers on key issues. These included leveraging artificial intelligence (AI) and big data in the telecommunications sector, promoting domestic network and telecom equipment manufacturing, and establishing regulatory mechanisms for submarine cable landing in India.
tele.net takes a look at the major policy and regulatory initiatives taken during the past year and the outlook for 2024…
Key policy moves
- Implementation of the Indian Telecommunications Act, 2023: The new legislation has introduced several structural changes in the Indian telecom legal framework. These include a shift towards an authorisation system aimed at streamlining licensing, administrative allocation of spectrum for specific sectors, and provisions for sharing, trading and leasing of spectrum. The act empowers the government to reclaim unutilised spectrum, establishes a voluntary disclosure mechanism for compliance and sets up a tiered dispute resolution structure. In addition, it grants interception powers to the government in cases of public emergency, national security, or war, enabling the control and management takeover of telecommunication services. The legislation also paves the way for the administrative allocation of satellite spectrum, aligning with global norms.
- Introduction of the Digital Personal Data Protection Act, 2023: In August 2023, Parliament passed the country’s first law on the protection of users’ personal data, providing safeguards for personal data and outlining the rights and responsibilities of various entities such as data principals (data owners), data fiduciaries (data collectors and custodians), data processors (entities processing data on behalf of fiduciaries) and consent managers (intermediaries between principals and fiduciaries). The act imposes strict compliance standards on “significant data fiduciaries”, defined as entities collecting data beyond a specified threshold (exact amount unspecified) or data with potential impacts on electoral democracy, sovereignty, or security in India. These entities are required to designate “data protection officers” based in India as points of contact and appoint independent auditors to conduct regular data audits.
- Introduction of the Indian Space Policy, 2023: In April 2023, the government launched a new legislative framework for space communications, allowing private operators to launch high speed broadband services from low earth orbit and middle earth orbit satellite constellations. The policy extends to non-governmental entities or private satellite operators, enabling them to offer national and international space-based communications services via owned, procured, or leased geostationary orbit or non-geostationary orbit satellite systems. The policy authorises private satellite players to establish and operate satellite earth stations and control centres in India, utilising Indian or non-Indian orbital resources for communication services within and outside India.
- Amendments to the Indian Telegraph Right of Way [RoW] Rules, 2016: To further simplify the deployment of telecom infrastructure in the country, the government introduced several amendments to the RoW Rules such as allowing licensees to establish temporary overground telegraph infrastructure for 60 days in case of damage to existing underground infrastructure, without any fee or compensation, and giving them the option to submit a single application for multiple sites for small cell deployment, with no administrative fees or compensation on buildings and structures provided by central authorities. Additionally, the amendments rationalise the schedule for fees, charges and compensation for different activities outlined in the central RoW Rules.
- Expansion of the Digital India programme: In August 2023, the government sanctioned a total outlay of Rs 149.03 billion to enhance the Digital India initiative. The expansion focuses on cybersecurity, including enhancing the capabilities of the Indian Computer Emergency Response Team (CERT-In). A portion of the funding will be leveraged to support 1,200 start-ups in Tier 2 and Tier 3 cities, and launch a cybersecurity awareness programme to upskill around 120 million participants. Further, the DigiLocker platform will be extended to micro, small and medium enterprises (MSMEs) as a stand-alone app for digital document verification. Meanwhile, nine new supercomputers and three centres of excellence will be established for research on artificial intelligence applications in healthcare, agriculture and sustainable living under the National Supercomputing Mission.
- New spectrum trading norms: In the past year, the government also eased spectrum trading norms, allowing telecom operators to trade radiowaves in a frequency band based on the block size specified in the last auction. This modification enabled operators to lease spectrum to captive non-public network licence holders for internal business use. The updated guidelines specify that block sizes for access spectrum trading should align with those specified in the notice inviting application for the latest auction. If any residual spectrum is available for trading, it may be considered on a pro-rata basis. Previously, telecom operators were restricted to trading spectrum in block sizes ranging from 1.25 MHz paired spectrum to 20 MHz in higher frequency bands. The revised rules now allow trading in block sizes of up to 50 MHz, depending on the frequency band.
- State-level initiatives: Several state governments also implemented major policy changes to increase telecom infrastructure deployment. The Haryana government approved the revised Communication and Connectivity Infrastructure Policy, 2023, aligning with the amended Indian Telegraph RoW Rules, 2016. The revised policy promotes the adoption of advanced technologies such as fibre-to-the-home and open access network, proposes strategies to optimise RoW availability, and allows multiple service providers to share infrastructure. Meanwhile, the Delhi government also released the Delhi RoW Policy for Underground Infrastructure and Overground Infrastructure, 2023, facilitating telecom infrastructure deployment by aligning with central RoW Rules. The policy outlines guidelines for the use of street furniture, establishment of telegraph infrastructure, and utilisation of ducts for optical fibre cables. Meanwhile, the Madhya Pradesh government introduced a policy with a focus on accelerating 5G network expansion, and streamlining government approvals for telecom and internet service providers. This policy aims to make 5G accessible statewide within 1.5-2 years, with a 60-day disposal time frame for licence applications on government land.
Regulatory recap
- Recommendations on leveraging AI and big data in telecom: In July 2023, TRAI released its recommendations for leveraging AI and big data in the telecom sector, advocating prompt implementation of a comprehensive regulatory framework for responsible AI development. The regulator proposed the establishment of the Artificial Intelligence and Data Authority of India (AIDAI) as an independent statutory body, and the creation of a multi-stakeholder body as an advisory entity to the AIDAI. The recommendations also included categorising AI use cases based on risk and outlining principles for responsible AI. Further, TRAI suggested integrating a data digitalisation and monetisation council within the AIDAI, assigning roles in framing regulations, recommending policies and overseeing data-related issues.
- Ease of doing business recommendations: In May 2023, TRAI outlined measures to enhance the ease of doing business in the telecom and broadcasting sectors, including the grant of infrastructure status to the broadcast and cable sector and establishment of a digital single-window system for online processes. To reduce compliance burden for internet service providers (ISPs), TRAI suggested revising the periodicity for the submission of ISP details to once a year. In addition, TRAI recommended moving permissions for submarine cable laying and operations to an online platform, and proposed the creation of a committee to identify and declare special corridors in the Indian marine context.
- Quality of Service Regulations (Code of Practice for Metering and Billing Accuracy), 2023: TRAI also introduced new regulations in the past year to simplify the audit process for telecom service areas, reducing the frequency of audits from four to one per financial year, thereby reducing the audit burden by 75 per cent. The regulations focus on wider coverage in tariff plans, prompt refunds for overcharged amounts, and upfront financial disincentives for non-compliance.
- Promotion of domestic network and telecom equipment manufacturing: In order to increase domestic network and telecom equipment manufacturing, TRAI recommended measures such as facilitating local value addition, highlighting telecom software as a distinct product line, promoting exports, supporting MSMEs and creating a robust component ecosystem. Further, the regulator proposed the introduction of a production-linked incentive scheme for components and sub assembly manufacturing, a preferential market access mechanism linked to gross revenues, and a development fund (NATEDF) to provide financing, venture capital funding, interest subvention, and financial assistance to address industry challenges and promote innovation-driven manufacturing with lower corporate income tax and venture capital funding for start-ups.
- Regulatory proposals for submarine cable landing: In June 2023, TRAI put forth licensing and regulatory recommendations for submarine cable landing in India, addressing concerns raised by the Department of Telecommunications (DoT) regarding Indian international long distance (ILD) operators seeking clearance for submarine cables without ownership stakes. The guidelines covered various aspects, including the categorisation of cable landing stations, ownership criteria, the use of Indian flag vessels for cable operations, and the establishment of cable depots. The recommendations also emphasised the need for essential services status and customs duty exemptions for critical communications infrastructure.
- Recommendations for rating of buildings or areas for digital connectivity: In February 2023, TRAI proposed changes to building regulations and the National Building Code to facilitate the integration of digital connectivity infrastructure within buildings. TRAI’s recommendations include the installation of essential components such as fibre optic cables and Wi-Fi access points within buildings, with provisions related to the maintenance and enhancement of this digital infrastructure included in the builder-buyer agreement. In addition, TRAI proposed a mandatory rating system for digital connectivity in buildings, particularly those of public significance such as airports, train stations, malls, special economic zones, and critical infrastructure. The aim is to assess the current level of digital connectivity in buildings, providing a benchmark for future upgrades and improvements. Further, in September 2023, TRAI invited inputs from stakeholders on the criteria for building ratings, essential eligibility conditions, the code of conduct for the rating agency, the rating template, and the procedure for determining ratings, among other considerations.
- Recommendations for improving telecom infrastructure in the north-eastern and Himalayan states: To enhance telecom infrastructure in the north-eastern and Himalayan states, TRAI recommended aligning state RoW policies with the central rules, prioritising electricity provision to telecom sites and waiving last-mile installation charges. Additionally, it suggested leveraging the Universal Service Obligation Fund for solar back-up installations, providing subsidies for optical fibre cable (OFC) connectivity via competitive bidding, and prioritising 4G saturation in underserved villages. For Himachal Pradesh, TRAI proposed dedicated funding for 4G/5G cellular coverage in strategic border areas, strengthening of OFC backhaul connectivity, and collaboration with the Ministry of Defence for leased OFC. TRAI also issued recommendations for improving telecom coverage and backhaul infrastructure in the remote areas of Ladakh.
In addition to the above-mentioned regulatory initiatives, TRAI initiated discussions to explore and address the challenges and opportunities presented by the rapid advancement of emerging technologies, with a focus on ensuring inclusivity for all societal segments and industries, particularly MSMEs. Furthermore, the regulator began consultative processes to identify policy challenges and propose a suitable framework for the swift adoption and efficient utilisation of new technologies, fostering holistic and sustainable economic development driven by the 5G ecosystem.
TRAI also sought inputs on the allocation of spectrum for non-commercial use in E and V bands, as well as the assignment methodology in cases where auctioning is not possible. It also solicited feedback on the feasibility, including technical parameters, of permitting low-power, indoor, consumer device-to-device communication on a licence-exempt basis. In its consultation paper on terahertz bands, TRAI invited feedback from stakeholders on the potential authorisation of licence-exempt operations within specific frequency ranges, including 116-123 GHz, 174.8-182 GHz, 185-190 GHz and 244-246 GHz, and the necessity of permitting licence-exempt operations in any other bands within the 95 GHz-3 THz frequency range. The regulator also initiated a consultative process to establish a regulatory framework for over-the-top communication services.
In other major developments, TRAI rejected DoT’s claim that cloud services fall under the Ministry of Electronics and Information Technology’s jurisdiction, asserting its authority to make recommendations on cloud services. It released draft regulations for mobile number portability, allowing operators to scrutinise requests. It also released a white paper on the 6 GHz spectrum band, proposing auction, non-auction, or hybrid allocation options, with the hybrid model suggesting unlicensed use for the lower part and licensed use for the upper part of the spectrum band (5925/5945-6425 MHz for unlicensed and 6425-7125 MHz for licensed use).
What lies ahead for the Indian telecom sector in the year 2024
In 2023, the Indian telecom sector witnessed a significant policy overhaul with the implementation of the Telecommunications Act, 2023 and the Digital Personal Data Protection Act, 2023. The enactment of these ground-breaking legislations has set the stage for significant changes in the Indian telecom landscape throughout 2024. Anticipated developments include a further expansion of the country’s 5G ecosystem, and the rapid growth of several next-generation technologies such as internet of things, edge computing, network slicing, cloud-based services and artificial intelligence/machine learning.
Despite the optimistic outlook, several challenges persist. These include the financial distress in the sector, which can be addressed by implementing sustained tariff hikes, effectively monetising 5G services, mitigating cybersecurity threats, and bridging the digital divide. While the government has laid the necessary foundation through policies and regulations to improve the industry’s financial performance, the onus is now on telecom companies to spearhead the sector’s recovery. The success of these reforms hinges on the industry’s ability to align with them, necessitating increased investments in infrastructure, concerted efforts to minimise operational inefficiencies, and a heightened focus on enhancing service quality.
