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 Telecom Policy 2012 (the NTP 2012), which was approved in May 2012;
- 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 four policy statements:
- National Telecom Policy, 1994;
- New Telecom Policy, 1999;
- Broadband Policy, 2004; and
- National Telecom Policy, 2012.
Some of the key objectives envisaged by the NTP 2012 included: increasing rural tele-density, high speed broadband, creating a ‘one nation, one licence’ policy, achieving one nation, full mobile number portability and various other objectives that have already been complied during the policy period. Looking forward to the next set of telecom policy, 2018 DoT has stated that the new telecom policy will be governed by the key guiding principle of alignment with the national vision. Its major themes, inter alia, will be regulatory and licensing frameworks impacting the telecom sector, connectivity for all, quality of services, ease of doing business, and absorption of new technologies including 5G and Internet of Things (IoT). The government, through the new telecom policy, seeks to spur the socioeconomic development up to the bottom of the pyramid by ensuring voice, video and data connectivity for all. The overall aim is to aid digital transformation of the government, enterprises and industry, infrastructure development including development of world-class cities through planned urbanisation, and assume a leadership role in the world economy.
TRAI has issued recommendations dated February 2018 providing inputs on formulation of the National Telecom policy, 2018 on the request of DoT. The vision has been set out as ‘To develop a competitive, sustainable, and investor-friendly Information and Communication Technologies (ICT) market for rollout of state-of-the-art ubiquitous digital communication infrastructure to provide resilient, reliable, affordable, and consumer friendly products and services to meet local as well as global needs; and in the process, transform India’s knowledge economy, support inclusive development, foster innovation, and stimulate job creation’. In its recommendations, TRAI has laid out the strategies for achieving the following objectives:
- for enhancing ease of doing business, establishment of an online platform for G2B activities, rationalise licensing and regulatory regime, attract investment equivalent to US$100 billion in the communication sector, and to leapfrog India into the top 50 nations in international rankings;
- to achieve ‘unique mobile subscriber density’ and mobile network coverage targets, and to provide enhanced data connectivity to all the Gram Panchayats;
- to enable access for wireline and wireless broadband services at affordable prices; to develop public WLAN hotspots; to achieve broadband subscription targets; to facilitate RoW permissions; and to achieve backhaul connectivity targets on optical fibre;
- to enable access for IoT and machine to machine (M2M) sensors and devices;
- for setting up of data centres; developing ecosystem for indigenous digital platforms and services; establishing India as a global hub for research and development, innovation, cloud computing, content hosting and delivery, and data services; to become net positive in international trade of telecommunication systems and services; and job creation in ICT sector; and
- for protecting the interest of consumers, data protection regimes, and modernising public safety and emergency communications networks.
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 check list.
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