Licensing has been a cornerstone of India’s telecommunications law. The Indian Telegraph Act, 1885, granted the government the authority to license individuals to establish, maintain or use telegraphs. However, until the early 1990s, the government held a complete monopoly in the telecom sector. This changed in 1992, when it began allowing licensing in the sector. In December 2023, Parliament enacted the Indian Telecommunications Act, 2023. This new statute amends and consolidates laws related to the development, expansion and operation of telecommunication services and networks, spectrum assignment, and related matters. Most recently, in June 2024, the Department of Telecommunications (DoT) requested the Telecom Regulatory Authority of India (TRAI) to provide recommendations on the terms and conditions, including fees and charges, for authorisations to provide telecommunication services under the new act. DoT also requested TRAI to explore the possibility of reducing the number of authorisations and simplifying, merging or rationalising the terms and conditions to enhance the ease of doing business.

Background

Before the Telecommunications Act, 2023, the licensing of telecommunication services in India was primarily governed by the Indian Telegraph Act, 1885, and the Indian Wireless Telegraphy Act, 1933. The modern telecommunication service licensing regime began in 1994, when DoT issued licences to private entities for cellular mobile telephone services in the four metro areas of the country. This marked the beginning of a broader licensing framework that gradually encompassed various telecommunication services.

In 2013, the government introduced the unified licensing (UL) regime for telecommunication services. This allowed eligible entities to obtain the necessary authorisations from the government for providing a wide range of telecommunication services to customers. For services not covered under the UL or UL for virtual network operator (VNO) framework, the government issued standalone licences, authorisations or registrations. Each type of authorisation, whether under UL, UL for VNO or standalone, had its own set of terms and conditions as prescribed by the government. After considering TRAI’s recommendation on VNOs, the government, in 2016, introduced VNOs under the regime of UL for VNO with the aim to delink the licensing of networks from the delivery of services.

Authorisation of telecom services

Telecommunication services can be classified into two broad categories: public and non-public. They can also be classified as captive and non-captive. Public telecommunication services are those provided to the public, while non-public telecommunication services are not available to the public. Captive telecommunication services are provided by an entity to meet its internal communication needs, whereas non-captive telecommunication services are offered by an entity to third parties, such as enterprises.

However, the Telecommunications Act, 2023 mandates that anyone intending to provide telecommunication services must obtain authorisation from the government. This authorisation is subject to terms and conditions, including fees or charges, as prescribed by the government.

Framework for granting authorisations

Manner of granting authorisations

The Telecommunications Act, 2023 defines “authorisation” as a permission granted under this act for providing telecommunication services, establishing, operating, maintaining or expanding telecommunication networks, or possessing radio equipment.

In the international context, countries such as the US, the UK, Australia and Singapore require applicants to seek authorisation from sector regulators or governments to provide telecommunication services. Applicants must provide the necessary information, and if satisfied, the regulators issue licences authorising the requested services. These licensees

must comply with telecommunications laws and regulations set by the sector regulators or governments.

To provide telecommunication services under the Telecommunications Act, 2023, individuals or entities must obtain authorisation from the government. That said, TRAI has sought the views of stakeholders on whether the government should adopt the international practice of issuing authorisations to applicant entities, instead of the current practice of entering into licence agreements with them.

Structure of authorisations

The existing licensing framework comprises the UL, UL for VNO, and standalone licences/authorisations/registrations. Generally, public telecommunication services and non-public non-captive telecommunication services are governed through the UL and UL for VNO. In contrast, captive telecommunication services and value-added services are governed through standalone licences, authorisations or registrations.

To grant authorisations under the UL, the government has established guidelines detailing the structure of the UL and the application process. These guidelines include eligibility conditions, entry and licence fees, terms of the licence, equity holding in other companies, provision of telecommunication services using satellite media, security conditions and procedures for the migration or renewal of existing licences.

To this end, TRAI has sought stakeholders’ views on whether authorisations should be granted in the form of an authorisation document containing essential aspects, such as the service area, period of validity, scope of service, applicable rules, authorisation fees, and terms and conditions. These terms and conditions could be included in rules made under the Telecommunications Act, 2023, with safeguards to protect the interests of authorised entities in case of rule amendments. TRAI is also interested in identifying the essential aspects that should be included in authorisation documents and determining the broad categories of rules under which the terms and conditions of various authorisations could be prescribed.

That said, in light of the Telecommunications Act, 2023, it is crucial to establish safeguards that ensure long-term regulatory stability and business continuity for service providers. At the same time, authorisations and associated rules should remain dynamic documents that can adapt to contemporary developments.

Single authorisation for end-to-end telecommunication services

Until 2012, India’s telecommunication licensing regime was service-specific, requiring licensees to obtain separate licences for different services such as access service, national long distance (NLD) service, international long distance (ILD) service, internet service and public mobile radio trunking service. In April 2012, TRAI recommended guidelines for UL and the migration of existing licences to DoT.

TRAI recognises that smaller players may still prefer to offer specific services in limited geographical areas. Therefore, it is desirable to continue offering the option of obtaining separate authorisations for various services with relevant service areas. While the proposed single unified service authorisation for providing end-to-end telecommunication services could be available nationwide, TRAI notes that to protect smaller players’ interests, the existing practice of assigning access spectrum and network interconnection at the telecom circle/metro area level may need to continue. Consequently, entities authorised to provide end-to-end telecommunication services at the national level may still need to fulfil certain requirements and obligations at the telecom circle/metro area level.

Therefore, TRAI has raised concerns about whether, in addition to service-specific authorisations at the service area level, there is a need to introduce a unified service authorisation at the national level for the provision of end-to-end telecommunication services with a pan-India service area under the Telecommunications Act, 2023.

Enhancing scope under Internet Service Authorisation

Under the current licensing regime, an internet service authorisation holder is not permitted to provide non-public communication services such as leased circuits, whereas an access service authorisation holder can provide leased circuits within its service area. TRAI is seeking stakeholders’ views on whether the provision of leased circuits/virtual private networks (VPNs) should be included within the scope of “internet service authorisation” under the Indian Telecommunications Act, 2023.

Additionally, DoT has suggested examining the possibility of reducing the number of authorisations. To this end, TRAI is exploring several options:

  • Clubbing the scopes of the existing NLD service authorisation and ILD service authorisation under a single authorisation
  • Clubbing the scopes of the existing global mobile personal communications by satellite and very small aperture terminal closed users group service authorisation under a single authorisation.
  • Clubbing the scopes of existing infrastructure provider-I registration and digital connectivity infrastructure provider authorisation under a single authorisation.

TRAI has invited inputs from stakeholders on these potential changes to the authorisation framework, including the feasibility and desirability of these proposals, to streamline and simplify the regulatory environment for telecommunication services.

The way forward

Moving forward, it is essential to review all terms and conditions under the existing licenses and authorisations under the Telecommunications Act, 2023, to improve the ease of doing business in the telecommunication sector. One possibility could be to introduce a subcategory of authorisation for access service with a smaller geographical area, similar to the service area for access service Category B under the UL (VNO) regime. This would allow an entity to obtain access service authorisation for a district, lease spectrum from an entity holding access spectrum in the telecom circle/metro area, and provide access services within its authorised service area. This approach could also enhance flexibility and accessibility for smaller players, fostering competition and innovation in the telecommunication sector while aligning with the new regulatory framework.

Niha