The Telecom Regulatory Authority of India (TRAI) has released a consultation paper titled “Encouraging Innovative Technologies, Services, Use Cases, and Business Models through Regulatory Sandbox in Digital Communication Sector.” Through the consultation paper, the regulator has sought suggestions for creating a holistic framework to drive cutting-edge tech innovation in the digital communication sector with transparent and safe live testing environments, also known as regulatory sandboxes.

In the consultation paper, TRAI has invited stakeholder views on the ideal eligibility criteria for companies to participate in such a sandboxing framework and on ways to encourage the participation of startups and small and medium-sized enterprises (SMEs) in the mega digital tech innovations endeavour. It has also sought suggestions on ways to protect consumer interests in a sandboxing environment, especially from potential data breaches, fraud and other security risks. 

As per TRAI, it recognised the potential benefits of sandboxing and in the Telecom Commercial Communications Customer Preference Regulations, 2018. The authority stated that it may set up or permit to set up a regulatory sandbox for testing implementation of regulatory checks using distributed ledger technology (DLT) networks and other technological solutions complementing DLT network(s) and to operationalise such regulatory sandbox, the authority might specify the requisite processes. TRAI has mentioned that there is no immediate need of a regulatory sandbox. However, in future, whenever it is required, it will take appropriate action to examine the innovative solutions offered, its implementation feasibility and requirements in the sector, on a case-to-case basis using the regulatory sandbox approach.

TRAI has also called for inter-sectoral collaboration to boost tech innovation under the sandbox framework, especially as many 5G/6G use cases will require close coordination with regulators and other stakeholders like municipalities, power distribution companies, state and central ministries, airports, ports, metro trains, smart city authorities etc. It added that the sandbox model can provide a structured avenue for the licensor/regulator to engage with the ecosystem and to develop an innovation-enabling or innovation-responsive framework that facilitates the delivery of relevant, low-cost service products.

On the eligibility criteria, TRAI has suggested that any licensed service provider, called principal applicant, shall be eligible for testing in the regulatory sandbox subject to fulfilment of laid conditions. The other entities, called applicants, willing to utilise the sandboxing facilities of any licensed service provider may engage with them.

TRAI has invited stakeholder comments by July 17, 2023, and counter-comments by August 1, 2023.