Communications policy

Regulatory and institutional structure

Summarise the regulatory framework for the communications sector. Do any foreign ownership restrictions apply to communications services?

The regulatory and policy framework encompassing the communications sector in India comprises a number of statutes, rules, regulations, guidelines, etc, laid down by the government of India. The primary statutes regulating the sector include:

  • the Indian Telegraph Act 1885 (the Telegraph Act);
  • the Indian Wireless Telegraphy Act 1933 (the Wireless Act);
  • the Telecom Regulatory Authority of India (TRAI) Act 1997 (the TRAI Act);
  • the telecoms policy amended from time to time, the latest being the National Digital Communications Policy 2018 (the NDCP 2018), which was approved in September 2018;
  • the Broadband Policy 2004; and
  • the Information Technology Act 2000 (the IT Act).

The Telegraph Act is the primary legislation underlying the telecommunications regulatory framework for India and prescribing various powers of the government to operate and regulate telecoms services in the country. Under the current regime, the task of granting licences and approvals to telecoms players for providing telecoms services in India has been assigned to the Department of Telecommunications, the Ministry of Communications and Information Technology (DoT). The DoT formulates and implements the telecoms licensing regime, under which licences and approvals are granted to corporations to carry out telecoms services.

The Wireless Act was formulated and implemented to regulate wireless communication and the possession of the concerned wireless telegraphy apparatus. It has been explicitly stipulated that the possession of any apparatus, appliance, instrument or material used or capable of use in wireless communication requires a licence from the DoT to that effect. A penalty has been prescribed for possession without the requisite licence.

In 1997, the government passed the TRAI Act and set up TRAI as the regulatory authority for the telecoms and broadcasting sector with the power to make policy recommendations on related issues. The TRAI Act also provides for the adjudication of disputes between the telecoms licensees and the DoT through the Telecom Disputes Settlement and Appellate Tribunal (TDSAT).

The DoT is responsible for formulating Policy Frameworks aimed at accelerating the growth of the telecommunication services. Recognising that provision of world class telecommunications infrastructure is the key to rapid socio-economic growth of the country, the government has been announcing its telecom policy statements at regular intervals since the onset of market liberalisation in the country in the early 1990s. In effect, post-liberalisation the Indian telecom sector has been shaped by five policy statements:

  • National Telecom Policy 1994;
  • New Telecom Policy 1999;
  • Broadband Policy 2004;
  • National Telecom Policy 2012 (NTP 2012); and
  • National Digital Communications Policy 2018.

The NDCP 2018 seeks to unlock the transformative power of digital communications networks - to achieve the goal of digital empowerment and well-being of the people of India; and towards this end, attempts to outline a set of goals, initiatives, strategies and intended policy outcomes. The NDCP 2018 aims to accomplish the following Strategic Objectives by 2022:

  • provisioning of Broadband for All;
  • creating four million additional jobs in the digital communications sector;
  • enhancing the contribution of the digital communications sector to 8 per cent of India’s GDP from approximately 6 per cent in 2017;
  • propelling India to the Top 50 Nations in the ICT Development Index of ITU, from 134 in 2017;
  • enhancing India’s contribution to Global Value Chains; and
  • ensuring digital sovereignty

The vision of the government as stated in the NDCP 2018 is to fulfil the information and communication needs of citizens and enterprises by establishment of a ubiquitous, resilient, secure and affordable digital communications infrastructure and services; and in the process, support India’s transition to a digitally empowered economy and society. In pursuit of accomplishing the above-mentioned objectives by 2022, the NDCP 2018 envisages three missions:

  • Connect India: creating robust digital communications infrastructure to promote ‘Broadband for All’ as a tool for socio-economic development, while ensuring service quality and environmental sustainability;
  • Propel India: enabling next generation technologies and services through investments, innovation and intellectual property rights (IPR) generation to harness the power of emerging digital technologies, including 5G, AI, IoT, cloud and big data to enable provision of future ready products and services; and to catalyse the fourth industrial revolution (Industry 4.0) by promoting investments, innovation and IPR; and
  • Secure India: ensuring sovereignty, safety and security of digital communications to secure the interests of citizens and safeguard the digital sovereignty of India with a focus on ensuring individual autonomy and choice, data ownership, privacy and security, while recognising data as a crucial economic resource.

Apart from the above-mentioned legislation, the Foreign Direct Investment (FDI) Policy, as amended from time to time, lays down the foreign investment and ownership restrictions for the sector. The government prescribes the threshold limits of investment, entry routes and other conditions for such investment under the FDI Policy, as amended from time to time. The FDI Policy segregates various services on the basis of foreign investment allowed, regulated and prohibited. Presently, with regard to the foreign investment in entities engaged in the telecoms services, although FDI up to 100 per cent is permitted for most of the telecoms services, certain service-specific conditions and entry restrictions for the investment coming from outside India may apply. Any amount of investment beyond 49 per cent in the telecoms entity would require the prior approval of the government. In November 2017 the DoT issued internal standard operating procedures for scrutiny of FDI cases in the DoT as well as a checklist.

Authorisation/licensing regime

Describe the authorisation or licensing regime.

The licensing regime for the provision of the telecoms sector witnessed a sea change in 2013 with the introduction and implementation of the ‘unified licence regime’. The unified licence regime has been implemented primarily with the objective of ‘one nation, one licence’, as envisaged under the NTP 2012. It replaces the earlier regime where the players were required to obtain separate licences for different telecoms services in India, such as internet services, national long-distance (NLD) services, international long-distance (ILD) services and so on.

The unified licence regime for the first time allows telecoms operators to offer all telecoms services under one licence, subject to separate service authorisation for the provision of different telecoms services, covered by the unified licence. The unified licence covers within its ambit all the fixed, mobile and satellite services and communication both on wireline and wireless media with full mobility, limited mobility and fixed wireless access. The service authorisations covered by the unified licence are:

  • access service;
  • internet service;
  • NLD service;
  • ILD service;
  • global mobile personal communication by satellite service;
  • public mobile radio trunking service;
  • very small aperture terminal closed user group service;
  • Indian national satellite system mobile satellite system reporting service; and
  • resale of international private leased circuit service.

The service areas for each of the service authorisations have also been defined. The unified licence is granted for a period of 20 years from the effective date of the licence. The general, operating, monitoring, financial and security conditions for each of the service authorisations have been divided into the general unified licence conditions (applicable irrespective of the service authorisation) and the specific service authorisation-related conditions (applicable only if the said authorisation has been granted). Apart from freeing up the spectrum from the licence, the unified licence also bars cross-holding in different telecommunications companies.

With regard to the official fees, the charging heads have been defined separately under the unified licence with different limits for entry fees, net worth, paid-up capital, bank guarantees and processing fees. However, where a licensee is applying for more than one service authorisation, the unified licence sets out the upper limits for such financial implications. The prescribed upper limits are also the amounts applicable in cases of the licensee applying for all the services covered by the unified licence. These have been fixed at 250 million rupees each for the minimum equity and net worth of the licensee company, 150 million rupees for the entry fees and 100,000 rupees for the application processing charges. For the provision of the services, an amount of 2.2 billion rupees has been fixed as the performance bank guarantee and 440 million rupees as the financial bank guarantee. In addition, 8 per cent of the adjusted gross revenue (AGR) shall be annually charged from the service providers as the licence fee, which includes the levy for universal service obligations, currently 5 per cent of AGR. However, it should be noted that the mechanism for computation of AGR has been specified for different service authorisations.

In addition to the unified licence, the DoT has also prescribed a registration process for infrastructure provider entities wishing to do business in India. This registration process covers the providers of telecoms infrastructure such as dark fibre, right of way, duct space and tower. The financial requirement for the registration includes a small processing fee and does away with the entry fees and bank guarantee. The infrastructure providers engaging in India would have an easier entry as they would merely have to register themselves rather than obtaining a licence.

To provide telecoms services in India, the players would require the unified licence and spectrum would have to be secured separately through the auction process. The auction of the 2G spectrum and the licences awarded in 2008 were quashed by the Supreme Court of India on the grounds of unconstitutionality; however, many of these quashed licences have been re-auctioned. Separately, the auction of 3G and BWA spectrum was held in 2010 and licences were issued. The last auction was conducted in September-October 2016; it was India’s biggest sale of airwave spectrum. The total of 2,354.55MHz of spectrum offered for sale divided in seven bands, of a value amounting to 5.63 trillion rupees. It was the first time that the DoT had auctioned spectrum in the 700MHz band. However, only 965MHz of spectrum worth 65,789.12 million rupees could be successfully sold. No bids were made for the 700MHz and 900MHz band. It can be deduced that the Indian telcos prefer short-range penetration over the long range.

Recognising the potential of Internet of Things (IoT) and Machine to Machine (M2M), emphasis was laid down in the NTP 2012 as: ‘To facilitate the role of new technologies in furthering public welfare and enhanced customer choices through affordable access and efficient service delivery. The emergence of new service formats such as Machine-to-Machine (M2M) communications (eg, remotely operated irrigation pumps, smart grid, etc) represent tremendous opportunities, especially as their roll-out becomes more widespread.’

It was also believed that launch of various government programmes such as Digital India, Make in India and Startup India will help immensely in driving the growth of the M2M/IoT industry in the country. In addition, many mega projects have been undertaken by the government of India, which will help in the effective and sustainable utilisation of resources by the application of M2M/IoT technology.

In May 2015, the DoT published the National Telecom M2M Roadmap after seeking inputs from certain stakeholders from the industry. The Roadmap focuses on communication aspects of M2M with the aim to have interoperable standards, policies and regulations suited for Indian conditions across sectors in the country. In addition, the Telecom Engineering Centre (TEC) of DoT has also come out with nine technical reports on M2M detailing sector-specific requirements and use cases to carry out gap analysis and future action plans with possible models of service delivery.

After going through a complete process of consultation with the concerned industry representatives and analysing various issues involved and also considering the comments received from stakeholders in their written responses, TRAI issued a set of recommendations on 5 September 2017 on various aspects of M2M services including its regulation under a possible registration process or appropriate licensing and security concerns. TRAI recommended that device manufacturers should be mandated to implement Security by Design principles in M2M device manufacturing so that end-to-end encryption can be achieved, and the government should provide comprehensive guidelines for manufacturing and importing of M2M devices in India.

However, the above recommendations of TRAI have not been fully completely incorporated in to respective policies and guidelines. In this regard, DoT issued a set of instructions dated 16 May 2018, for implementing restrictive features for SIMs used only for M2M communication services and related Know Your Customer (KYC), security and other instructions relating to provisioning of M2M services in India by the licensed telecom service providers.

Flexibility in spectrum use

Do spectrum licences generally specify the permitted use or is permitted use (fully or partly) unrestricted? Is licensed spectrum tradable or assignable?

The legal regime relating to the spectrum policy is contained under the Telegraph Act and the Wireless Act and the rules and regulations thereunder. The Wireless Planning and Coordination Wing of the DoT (WPC) has been constituted as the regulatory authority responsible for frequency management, including licences. The WPC is divided into a number of departments, one of the most important functions being the formulation and implementation of the National Frequency and Allocation Plans.

Previously, spectrum allocation was linked to the granting of a licence by the DoT; however, as contemplated by the NTP 2012, the unified licence has delinked spectrum from the licence. The Supreme Court of India decided that all natural resources, including spectrum, should be granted by way of auction (ie, market-related processes only). However, spectrum can be used only for the purposes for which it was granted.

The government permitted spectrum sharing and trading and has issued specific guidelines for sharing and trading of access spectrum. However, spectrum leasing has not been permitted. In terms of the Spectrum Sharing Guidelines, all access spectrum has been permitted to be shared, provided that the telecom operators intending to share have spectrum in the same band. Further, the Spectrum Trading Guidelines permit trading of spectrum only between two access service providers holding the prescribed licences along with the proper authorisation of access service in a service area.

NDCP 2018 recognises spectrum as a critical natural resource and enabler to achieve India’s socio-economic goals of inclusive growth and development. Accordingly, the government issued the National Frequency Allocation Plan 2018 (NFAP-18) which aims to provide a roadmap for the availability and allocation of wireless spectrum to facilitate the development and deployment of next-generation wireless services in the country. The NFAP-18 is notable for several firsts that are expected to drive the sustainable growth of wireless services in India in the years to come. A few of the most notable contributions are:

  • a massive expansion in the quantum of Licence Exempt Spectrum from 50MHz to 605MHz in the wireless access services to promote high speed broadband through Wi-Fi;
  • a formal recognition to Short-Range Devices (SRDs) and Ultra-Wideband Devices (UWDs) through the allocation of licence-exempted spectrum in several bands for such devices; and
  • enhancing the transparency in terms of providing consolidated and comprehensive information on all International Mobile Telecommunication (IMT) bands.
Ex-ante regulatory obligations

Which communications markets and segments are subject to ex-ante regulation? What remedies may be imposed?

The basic regime governing the players and their conduct in the market is contained in the telecoms licence, which does not impose substantial ex-ante regulations.

The unified licence requires the licensee company to have the minimum prescribed amount of equity and net worth, which is the same for all players across the sector. Although the unified licence allows interconnection on the basis of the mutual agreements between the service providers, they will at all times conform with the orders, regulations and guidelines issued by TRAI in relation to the interconnection usage charges. The telecoms licensee must also not discriminate in any manner in the provision of its services. To ensure the same TRAI issued ex-ante steps for regulating differential tariff for data services based on content by issuing the ‘Prohibition of Discriminatory Tariffs for Data Services Regulations, 2016’. This would disallow service providers to offer or charge discriminatory tariffs for data services on the basis of content being accessed by a consumer.

Last year a debate arose on turf wars between the competition regulators (ie, Competition Commission of India (CCI) and sector-specific regulators in India such as TRAI) the possible scope of ex-ante regulations were brought into the limelight. Hitherto, the understanding was that ex-ante competition matters fell in the domain of TRAI, and ex-post matters such as predatory pricing were the turf of the CCI. Last year, Reliance Jio Infocomm Ltd started giving free voice and data services in promotional offers to its subscribers to increase its customer base. The incumbents in the telecom sector, Vodafone India Ltd, Bharti Airtel Ltd and Idea Cellular Ltd, alleged in their several complaints before the CCI that Reliance Jio was engaging in predatory pricing. Arguably, it was not fair competition as the ‘promotional offer’ went on for several months.

However, the complaints before CCI bore no results, as Reliance Jio was not in a dominant position. Thus, the way CCI understands and acts against predatory pricing in the present scheme of legislative mandate is bound to leave an enforcement gap through which cases like Reliance Jio can leak. These are the gaps that TRAI can fix ex-ante to ensure fair competition.

In a recent development, in the case of CCI vs Bharti Airtel Limited and others, the Supreme Court, from the jurisdiction perspective had analysed whose jurisdiction, at the first instance, shall prevail (ie, TRAI (Sectoral Regulator) or the CCI) when certain jurisdictional facts pending before the Sectoral Regulator also form part of the inquiry before the CCI. The Supreme Court clarified that where a Sectoral Regulator exists, it is the competent authority to decide the jurisdictional facts and technical issues at the first instance. Thereafter, the CCI can be activated to investigate the matter going by the criteria laid down in the relevant provisions of the Competition Act and take it to its logical conclusion.

Thus, a balancing approach was adopted by the Supreme Court as the CCI’s jurisdiction to look into the telecom matters is not ousted. It is only the CCI that is empowered to deal with the anticompetitive act from the lens of the Competition Act.

Structural or functional separation

Is there a legal basis for requiring structural or functional separation between an operator’s network and service activities? Has structural or functional separation been introduced or is it being contemplated?

One of the strategies for seamless delivery of converged services was to move towards a unified licence (UL) regime and facilitate delinking of licensing of networks from the delivery of services so that the telecom service provider (TSP) can utilise their networks and spectrum efficiently by sharing active and passive infrastructure and also to facilitate resale at service level by introduction of Virtual Network Operators (VNOs). In a convergence era, the same network can provide various services that are independent of the network layer, meaning that delivery of services can be provided by one operator and network may be owned by a distinct operator. Accordingly, the government issued guidelines for granting ULVNOs in March 2016.

Universal service obligations and financing

Outline any universal service obligations. How is provision of these services financed?

The universal service obligations (USOs) were introduced in India by the DoT further to the objectives laid down under the National Telecom Policy of 1999. The purpose of implementation of the USOs is to provide access to the telegraph services (such as internet, voice-over-internet protocol (VoIP) and other new technology services) to the populations residing in the rural and other remote areas of India at an affordable price. The new technology services such as VoIP and next-generation networks, for which the DoT has not prescribed any specific licence or approval, have now been included within the purview of the unified licence.

To accomplish the USOs, the DoT has set up the Universal Service Obligation Fund (USOF), which was given statutory status by the Indian Telegraph (Amendment) Act 2003. At the time of its establishment, the primary aim of the USOF was to provide access to only basic telegraph services; however, its ambit was increased to include all types of telegraphic service by the Indian Telegraph (Amendment) Act 2006. The Telegraph Rules 1951 were also subsequently amended for administration of the USOF and to enable support for mobile services and broadband connectivity in rural and remote areas of the country and to provide subsidy support to eligible operators for operational sustainability of rural wireline household direct exchange lines. The levy for the USOF is included in the annual licence fees of 8 per cent of the AGR levied on all the telecoms licensees and amounts to 5 per cent of the AGR.

The USOs apply to ICT services provided to rural and remote areas. The services include Public Access Service, by operation and maintenance of village public telephones and rural community phones, creation of infrastructure for provision of mobile services in such areas, creation of general infrastructure in such areas for development of telecommunications facilities and induction of new technological developments.

For providing broadband connectivity to such areas, USOF has signed an agreement with a state-owned TSP. The Rural Wire-line Broadband Scheme anticipates offering wire-line broadband connectivity to rural and remote areas, making use of the existing rural exchanges infrastructure and copper wire-line network. This scheme is being implemented at national level in India. To extend the broadband connectivity including last mile connectivity up to all villages under the Bharat Net project, the operating and capital expenses incurred shall be funded by the USOF.

Number allocation and portability

Describe the number allocation scheme and number portability regime in your jurisdiction.

The mobile number portability (MNP) regime allowing users to move from one service provider to another, retaining their number, was introduced in India in November 2010 on a pilot basis, before being launched nationwide in January 2011.

The regime allows the subscribers within a telecoms circle to carry over their mobile number to another service provider with the same circle. As a condition to the unified licence, the licensee would have to ensure that its network is compliant with the MNP rules, regulations and regime laid down and amended from time to time. Certain conditions, such as the payment of dues, submission of proof of identification and address have been laid down under the regime. The subscribers complying with such conditions may carry over their mobile number on the payment of the requisite fees.

In the course of implementation of the ‘one nation, full mobile number portability’ objective laid down by the NTP 2012, in September 2013 TRAI recommended to the DoT a pan-India basis MNP, wherein a mobile subscriber would be able to port the number licensed in one circle to another circle. Consequently, full nationwide MNP was finally implemented from July 2015. It was observed by TRAI that as a result, on the MNP facility a huge number of porting requests were being received by the customers and the majority of them were also being rejected in accordance with the regulations. Such rejection of porting requests created dissatisfaction and frustration among subscribers. To check this, TRAI issued Telecommunication Mobile Number Portability (Seventh Amendment) Regulations 2018 to MNP regulations 2009, wherein major shift in the mechanism for generating Unique Porting Code (UPC) has been provisioned. Responsibility of UPC generation has been shifted from donor operator to MNP service provider after real time query with database of donor operator. Porting process of individual mobile numbers has been modified, which will become faster and convenient as MNPSPs shall schedule the porting of a mobile number upon successful validation of a real-time query with the donor operator and does not require a port response from the donor as in the existing process.

Customer terms and conditions

Are customer terms and conditions in the communications sector subject to specific rules?

The Indian telecoms regulatory regime does not separately provide specific rules for the customer terms and conditions; however, broad rules on certain issues have been laid down.

The unified licence, besides describing the relationship between the telecoms players and the DoT, also stipulates a few outline conditions within which the licensee is to provide its services to the subscribers. The telecoms players have to ensure that the customer terms and conditions are within the purview of the licence granted and also do not violate any specific rules laid down by the DoT and TRAI.

The DoT and TRAI have at times in the past regulated certain aspects of telecoms services, such as limiting the number of daily messages that can be sent using the short-messaging service (SMS), regulation of unsolicited commercial communication (UCC) and the ‘do-not-disturb’ service, both in the interests of end customers. UCC and SMS are serious problems. TRAI has taken several initiatives since 2007 to try and protect consumers from these telemarketing calls and messages and has intervened from time to time, to control or mitigate this problem. TRAI issued a consultation paper on UCC dated September 2017, which provides an overview of various problem areas with the present system, like UCC-related complaints being on the rise, the long time taken to register or to take action against UCC complaints, victimisation cases, issues of similar headers, traceability of content providers, consent taking process, etc. It also highlights new trends like robocalls and silent calls, which may be of concern to customers.

TRAI also made recommendations on encouraging data usage in rural areas through provisioning of free data. In the past year it had stated that a scheme under which a reasonable amount of data, say 100MB per month, may be made available to rural subscribers for free and the cost of implementing this scheme must be borne by USOF. TRAI has also issued recommendations dated 9 March 2018 on in-building access by telecom service providers. To ensure that there is a ubiquitous voice and data network inside commercial and residential complexes and large public places like airports, hotels and multiplexes, the first and foremost requirement is that TSPs and infrastructure providers gain category-I access to in-building facilities and infrastructure.

Net neutrality

Are there limits on an internet service provider’s freedom to control or prioritise the type or source of data that it delivers? Are there any other specific regulations or guidelines on net neutrality?

There are currently no regulations or guidelines in place in India with regard to net neutrality. Hence it can be safely said that currently there are no limits on internet service providers’ freedom to control and prioritise the type or source of data. Net neutrality has been contemplated by the NTP 2012. However, granting a general recognition and acceptance of the principle, the telecoms regulator has in certain instances proposed investigations into the data plans and packages offered by certain telecoms providers to their subscribers, to determine whether they are in violation of net neutrality principles. There have been consultations initiated on the subject by TRAI, which issued a consultation paper on ‘Over-the-top Services and Net Neutrality’ in March 2015. The DoT also constituted a committee, which submitted a report dated May 2015 on net neutrality. Further, in December 2015, TRAI issued another consultation paper on ‘Differential Pricing for Data Services’, which raised concerns over zero-rating platforms being offered by telecom service providers. Having completed its detailed, two-stage, consultation process, TRAI has considered the various points of view and formulated its recommendations on the subject. This document lays down the recommendations starting with a discussion on the principle of non-discriminatory treatment, which forms the underlying basis of the net neutrality debate, which is followed by a discussion on the applicability of this principle to different categories of services, drawing a distinction between ‘internet access services’ and other ‘specialised services’ that currently exist or may evolve in the future. It also outlines reasonable traffic management practices identifying permitted exceptions and lays down the supplementary requirements of a robust framework for transparency and disclosures. Further, it provides a monitoring and enforcement framework to implement the recommendations on non-discrimination, reasonable traffic management and transparency.

Zero-rating is a practice where mobile operators do not charge end consumers for access to specific websites or apps, but instead charge the latter for the data consumed by consumers in accessing the website or app. As there is no specific regulatory legislation on net neutrality in India, zero-rating practices are discretely prevalent, being, however, subject to certain limitations. The ISPs and the telecom companies are prohibited from blocking, obstructing or delaying in any way, services and other internet and telecom traffic, unless necessary for reasons of congestion management, security, continuity of the network, etc. This blocking shall only be lawful, when necessary, to protect the integrity and security of the network or users’ terminals.

Bandwidth throttling is often adopted in India to avoid traffic congestion, there being no regulatory mechanism to keep a check on the traffic management methods adopted by the TSPs. Also, internet users can request an ISP to filter their internet traffic by blocking certain services and applications based on ideological grounds.

Platform regulation

Is there specific legislation or regulation in place, and have there been any enforcement initiatives relating to digital platforms?

Since 2015, Over the Top (OTT) services have witnessed a significant increase in adoption and usage. Technologies and networks for delivery of such services have also evolved during this period. Over a period of time TRAI has issued the various recommendations and regulations pertaining to multiple issues relating to OTT services such as the Regulatory Framework for Internet Telephony, prohibition on discriminatory tariffs on data services, net neutrality and privacy, security and data ownership in the digital services. To further consider the remaining issues related to regulatory imbalance between TSPs and OTT players providing services that can be regarded as the same or similar to services offered by TSPs and issues related to economic aspects of such OTT services, TRAI issued a Consultation Paper on Regulatory Framework for Over-The-Top (OTT) Communication Services in November 2018.

Next-Generation-Access (NGA) networks

Are there specific regulatory obligations applicable to NGA networks? Is there a government financial scheme to promote basic broadband or NGA broadband penetration?

The NGA networks are presently not regulated by specific rules or obligations. Nonetheless, TRAI is working towards defining specific rules and regulations for the development and implementation of NGA networks. Further to providing for a specific set-up for the NGA networks, TRAI has formed a core committee to advise in this regard and initiated a consultation process.

With a view to increased penetration into India, including the provision of telecoms services in rural and remote areas, the DoT mandated the establishment of the USO Fund in 2002. The Broadband Policy was introduced in India in 2004. Initially, it was mandated that the USO Fund would only be used for providing basic telecoms services to such areas; however, with the expanding telecoms industry and with an eye for modernisation, all sorts of telegraph and telecoms services were brought within the purview of the USOs and the Fund constituted for the same. In 2008, subsidy support was introduced for certain eligible operators to provide for operational sustainability of rural wireline household direct exchange lines. There have also been initiatives by the telecoms operators to promote broadband use in rural areas.

A regulatory framework specifically for NGA networks is expected to be established in the near future. In this regard, TRAI has on certain occasions initiated consultations with regard to a number of issues and frameworks on the implementation of NGA networks in India.

Data protection

Is there a specific data protection regime applicable to the communications sector?

There is no specific data protection legislation currently in place in India. However, with specific regard to the newly implemented regime, the unified licence explicitly sets out certain conditions for telecoms licensees to abide by to ensure that the data of end customers and subscribers remains secure.

As a blanket condition under the licence, the licensee is to ensure that all monitoring activities are to be carried out in accordance with any rules framed under the Telegraph Act for ensuring the privacy of voice and data. The Telegraph Act, in case of a public emergency or public safety, empowers the government, state government or an authorised government officer to order the non-transmission, interception, detention or disclosure of messages about a particular subject.

Additionally, to provide for an effective system of data protection, the Personal Data Protection Bill 2006 was introduced in 2006, but has not yet been formulated into a law. Subsequently, however, the Information Technology (Reasonable Security Practices and Procedures and Sensitive Personal Data or Information) Rules 2011 (Sensitive Personal Data Rules) were brought into effect in 2011 under the provisions of the Information Technology Act 2000, under section 43A of the IT Act. The rules provide for the implementation of reasonable security practices and procedures to be followed by entities handling sensitive personal data of individuals. These rules apply to all entities that acquire or deal with sensitive personal data or information of natural persons, irrespective of the nature of business activities. Thus, any part of big data falling within the ambit of sensitive personal data or information, which means personal information relating to a password, financial information, personal health condition and its records, sexual orientation, biometric information or any other details that are given to the body corporate for providing a service.

In the absence of any specific regime protecting the privacy of data in India, the Supreme Court of India has held that the right of privacy is a fundamental right of an individual. In a step towards this, the government of India constituted an expert committee under the chairmanship of Justice BN Srikrishna comprising of members from government, academia and industry to study and identify the key data protection issues and recommend methods for addressing them. The committee put out a White Paper in December 2017 to solicit public comments on what shape a data protection law must take. After almost a year of deliberations and consultations, the Committee has submitted its Report and the draft Data Protection Bill 2018 to the Ministry of Electronics and Information Technology on 27 July 2018, which is yet to be tabled in the parliament. The much-awaited Data Protection Bill 2018 makes ‘individual consent’ the keystone of data sharing. For consent to be valid, it should be free, informed, specific, clear and capable of being withdrawn. For sensitive personal data or information, consent will have to be explicit. The Bill is largely based on the principles of the General Data Protection Regulation in the EU.

Cybersecurity

Is there specific legislation or regulation in place concerning cybersecurity or network security in your jurisdiction?

India had no cybersecurity policy before 2013. It was on 2 July 2013 that the government unveiled the National Cyber Security Policy 2013. It aims at protecting public and private infrastructure from cyberattacks. It also intends to safeguard critical information such as personal information, financial and banking information, and sovereign data. The Cyber Security Policy 2013, along with providing a strong vision to secure the critical infrastructure and build a resilient cyberspace for citizens, business and government, also intends to circumvent any resultant economic instability arising from cyberattacks.

In the absence of any specific laws in this regard, the Information Technology (IT) Act 2000 and Rules provide for certain protections. The IT Act contains three major aspects (ie, legal recognition of electronic documents, electronic filing of documents with government agencies and to amend certain acts such as Indian Penal Code, Indian Evidence Act). The Act also covers cybercrimes under section 66 such as internet fraud, pornography, data theft and phishing.

The IT (Reasonable Security Practices and Procedures and Sensitive Personal Data or Information) Rules encapsulate provisions for data protection and privacy. However, as cybersecurity becomes an exponentially growing concern, the need for a consolidated legal framework has become a necessity that must be satisfied immediately. In addition to the above-mentioned provisions in place, the proposed Data Protection Bill, 2018 would also take care of the important aspects of cybersecurity.

Big data

Is there specific legislation or regulation in place, and have there been any enforcement initiatives in your jurisdiction, addressing the legal challenges raised by big data?

At present in India there is no specific legislation or regulation for big data. However, the data protection framework prescribed under the Sensitive Personal Data Rules under the IT Act would include big data practices in India. These rules provide that any body corporate handling sensitive personal data or information, as discussed above, shall conform to the same for handling and dealing with such information. It is also possible that personal or even non-personal data, when processed using big data analytics could be transformed into sensitive personal data. Therefore, there may be a need to create safeguards that will prevent misuse of personal information in these contexts of use mentioned in the White Paper issued by the Ministry of Electronics and Information Technology (MEITY).

Certain initiatives in relation to big data management have been taken by the government. The Department of Biotechnology plans to harness the power of big data to promote the biotechnology industry in India. Also, the Department of Science and Technology proposes to promote big data science, technology and applications in the country and to develop core generic technologies, tools and algorithms for wider applications for various government initiatives and functionalities.

Data localisation

Are there any laws or regulations that require data to be stored locally in the jurisdiction?

The National Data Sharing and Accessibility Policy is applicable to all sharable non-sensitive data generated using public funds. For use and transfer of such data, the user of the data must acknowledge the source, provider and licence of data by explicitly publishing the attribution statement. The Other Service Provider Guidelines, however, particularly bar any transfer or storage of data that originates on the Public Switched Telephone Network of Indian jurisdiction to any foreign jurisdiction, without prior consent.

According to the Information Technology (Electronic Service Delivery) Rules 2011 and Information Technology (Reasonable Security Practices and Procedures and Sensitive Personal Data or Information) Rules 2011, transfer of sensitive personal data and information by a body corporate or any person to another in India, or located in any other country ensuring the same level of data protection, may be allowed, only if it is necessary for the performance of the lawful contract between the body corporate or any person on its behalf and provider of information or where such person has consented to data transfer. In addition to it the body corporate must provide a privacy policy for dealing with such personal information and sensitive data.

Therefore, it can be decisively said that India does permit cross-border data transfers, provided that the data subject gives prior consent. In the telecom sector, India currently has a data localisation mandate with respect to customer account information. From industry experience, this does cause some inconveniences with regard to international clearing house activities, particularly with regard to global telecom companies that are looking to provide enterprise-level telecom consolidation. The proposed Data Protection Bill, 2018 provides for all the data localisation concerns; however, it is yet to become a law.

Key trends and expected changes

Summarise the key emerging trends and hot topics in communications regulation in your jurisdiction.

A number of policy initiatives by the government and DoT have led to a complete transformation with phenomenal growth in the sector over the past decade and it is poised to grow further. The regulatory framework concerning communications and telecoms in India witnessed an evolution in recent years with the implementation of certain key initiatives, including MNP, USO and the introduction of the unified licence, among other things. The country is projected to witness a high penetration of internet, broadband and mobile subscribers in the near future. These steps were taken in line with the objectives set by the NTP 2012.

The unified licence regime has simplified the telecoms licence regime and allows all telecoms services to be offered under one licence. The unified licence allows the sharing of spectrum among the various licences, which was not permitted earlier. The UL regime has resulted in major consolidation of the telecom industry, resulting in only a few players in the market.

A major development was observed in the area of inflight connectivity services on various aircrafts. TRAI had issued recommendations on ‘Introducing In-flight Connectivity Services in India’. After considering the recommendations of TRAI, the DoT issued Flight and Maritime Connectivity Rules, 2018 laying down the guidelines for provision of inflight connectivity services.

The upcoming trends in the sector would further lead to an upscale in the market. The government is targeting broadband connectivity from 15 million currently to over 600 million in 2020, with voice connectivity being carried forward to data and emerging technologies including cloud computing. The digital transformation is emerging as a key driver of sweeping change in the world around us. The telecommunication industry is at the forefront of this transformation. After connecting the individuals and enterprises, innovators are turning their attention to the M2M communications, which promise to connect billions of sensors and devices. Upgrading to 5G networks will connect wearable computers, a vast array of sensors, and other devices, leading to better health, economic gains and other advantages. The OTT segment is going to be a game changer in the digital space. A format set of legislation and regulation is expected form the government.