The recommendations on ‘ease of doing telecom business’ (Recommendations) were issued by the Telecom Regulatory Authority of India (TRAI) to the Department of Telecommunications, Government of India (DoT) on 30 November 2017. The Recommendations have been issued at a time when the telecom industry is grappling with one of its worst phases, and if adopted, will certainly galvanise both the DoT and telecom service providers (TSPs).
Simplification and consolidation of processes is the bedrock of the Recommendations
The Recommendations emphasise the importance of simplifying and combining procedures with a view to curtail timelines and ensuring that various applications filed before DoT are processed and approved in an efficient manner. It also addresses key issues that currently plague the sector and proposes the best approaches that can be considered by DoT.
At present, in case of a merger or an acquisition between TSPs, the TSPs have to wait inordinately for approval from the DoT, even if approval from High Court/National Company Law Tribunal (NCLT) has already been granted. To this end, the TRAI has suggested that DoT should amend the Merger and Acquisition Guidelines dated 20th February 2014 (M&A Guidelines) by specifying a definite timeline, i.e., not exceeding 30 days post NCLT’s approval on the scheme of merger, for providing written approval to transfer/merger of licences.
Another concern was that since the ‘Guidelines for Trading of Access Spectrum by Access Service Providers’ (Spectrum Trading Guidelines) were issued after the M&A Guidelines, the M&A Guidelines did not permit trading of any excess spectrum as a result of a merger or acquisition. The TRAI has recommended that in addition to the present right to surrender the excess spectrum, TSPs should also be allowed to trade it, within the stipulated period of one year from the date of approval.
In this breath, it is also relevant to mention that the Spectrum Trading Guidelines in its current form only permits trading of spectrum in particular bands and block sizes. The TRAI is of the view that Spectrum Trading Guidelines should be amended to state that trading is permitted in all access spectrum bands that have been put to auction, i.e. as specified in the notice inviting applications (NIA) for the latest auction.
TRAI has also noted that the functioning of the Wireless Planning and Co-ordination (WPC) wing of DoT can be made more efficient. It has suggested that processes for obtaining clearances from Standing Advisory Committee for Frequency Allocation (SACFA) should be made completely paperless without having to submit hard copies of documents after an online application has been made. Similarly, the TRAI has advised that import licenses should also be granted by WPC within a fixed timeline. Additionally, there should be no requirement to obtain another import license if the same equipment is to be deployed at another location.
The TRAI feels that if an existing TSP applies for renewal of its license or for migration from the old regime to the new Unified License regime, the condition of minimum net worth should not be applicable. In its view, under these circumstances it would be prejudicial for both the TSP and its customers if renewal or migration is denied on this ground. It could bring a smile to the faces of many TSPs if this recommendation is adopted by DoT.
The processes for return of bank guarantees to TSPs after fulfilment of their roll out obligations are very cumbersome at present. The TRAI is of the view that a definite time frame, not exceeding 12 months, should be defined and that return should not be delayed if the delay in testing is attributable to DoT.
Revision of existing financial penalty structure
Under the current licensing framework, the DoT has a right to impose heavy financial penalties. Often, the maximum penalty is imposed on TSPs even though the breach in question is minor in nature. The maximum penalties, which are as much as INR 50 crores for each event of breach in certain cases, may be unwarranted, especially without assessment of the severity of the incident.
In this respect, the TRAI has suggested that the DoT should devise a suitable matrix for imposition of financial penalties and that the penalty should correspond to the severity of the breach including the penalties for recurrence of a breach. If implemented, this is likely to take a significant burden off the TSPs, not to mention the time and other resources that will be conserved if arduous litigation is avoided.
Other salient recommendations
Some other notable recommendations made by the TRAI are as under:
- TSPs should be charged for roll-out obligations test fee only for the locations or areas i.e. DHQs/ BHQs/ SDCAs which have been actually tested by TERM Cells.
- Process of electromagnetic frequency (EMF) self- certification should also be made paperless.
- A list of other service providers (OSPs) (along with corresponding information such as location of OSP centre and validity of the OSP registration) can be published on DoT’s website to enable TSPs to verify if their customers are engaged in the provision of application services.
In the past, the TRAI’s recommendations for facilitation of telecom business in India have culminated in permitting spectrum sharing and liberalisation of administratively assigned spectrum, introduction of the Unified Licensing regime, issuance of merger and acquisitions guidelines, induction of virtual network operators etc.
The present Recommendations highlight the current lacunae in the telecom sector and, if accepted by DoT, will provide a much needed course-correction to a sector which is presently undergoing a lot of turbulence. Change in policies and process is the need of the hour. Ideally speaking, the DoT should consider these Recommendations as they may aid in streamlining telecom regime in India and encouraging TSPs, who are rather distraught in the current circumstances.