COAI Raises Concerns Over TRAI's Views On Service Authorisation Framework

Industry body COAI on Monday voiced concerns over TRAI's recent views on the service authorisations framework, saying the contractual nature of present licences must be retained in the authorisation process for regulatory certainty and safeguarding long-term investors. The telecom association - whose members include Reliance Jio, Bharti Airtel and Vodafone Idea - also expressed concerns over the exclusion of OTT communications services under the new authorisation framework.

Cellular Operators Association of India argued that the recent recommendations could have been an opportunity for suggesting financial reforms and easing of dues, but did not address the industry's concerns in this regard.

It also contended that OTT Communication Services were 'excluded' under the new authorisation as access service, and that 'this omission perpetuates an uneven competitive landscape' since Telecom Service Providers continue to bear the weight of extensive compliance and security requirements. "COAI expresses its concerns with the TRAI's Recommendations on the Framework for Service Authorisations under the Telecommunications Act, 2023," COAI Director General SP Kochhar said.

Since telecom licences in India are contractual agreements between the Department of Telecommunications and operators, these licences are legally binding contracts that outline rights, obligations and operational parameters to be followed by the telecom services.

"The DoT (representing the government) and the telecom operator are the two signatories of the same. Therefore, the authorisation process must continue to retain the contractual nature of the present licences, as this will ensure uniformity, regulatory certainty and protection to investors who commit long-term capital to the sector," Kochhar said.

According to the COAI, TRAI's recommendation that the central government should grant service authorisation under the Telecommunications Act, 2024, instead of entering into an agreement with the entity 'is without any valid justification and goes against the position of telecom service providers, while also undermining the current regime that has worked successfully for more than three decades - bringing enormous inflow of investments and growth in the sector'.

Moreover, COAI said the recommendation provided an opportunity for TRAI to facilitate and reduce the burden on the industry by suggesting financial reforms as badly required by the sector.

"COAI had highlighted the need to include only those revenues, which have been received under telecom services under various Authorisations for calculation of GR/AGR. However, this issue is unaddressed in the recommendation," it said.

It has been actively advocating for a reduction in licence fees and suggested the present rate be reduced from 3% to 0.5-1% and abolition of the USOF (Digital Bharat Nidhi) levy, which is 5% of AGR. It had also suggested doing away with the Performance Bank Guarantee, Financial Bank Guarantee and Bank Guarantee for Spectrum Payments (before the 2022 auction). COAI said the same has not been recommended by TRAI.

The telecom Industry, COAI said, is deeply troubled by the expanded scope granted to Internet Service Providers under the new authorisation framework.

"While currently access and National Long Distance service providers have the exclusive right to offer leased circuits and Virtual Private Networks to third parties, the proposed enhancement of ISP authorisation would unfairly disadvantage existing Access and NLD operators. These operators have earned their current market position through significant financial investments, including hefty entry fees and by satisfying stringent eligibility criteria," it said.

COAI believes that the concerns from the industry are important to be addressed, to ensure a healthy and robust environment for the TSPs and sector to perform going forward, Kochhar said.

"COAI shall look forward to working closely with the Government for discussions and amicable resolution of the issues going forward to ensure the required growth and motivation for this empowering sector in India," it added.