DoT pings Trai for clarity on authorisation regime

The Department of Telecommunications (DoT) has asked the telecom regulator to clarify and share additional information on certain points in the service authorisation framework recommendations, including on the adjusted gross revenue, as the government looks to make the new regime more lucrative for the telecom operators so that they voluntarily adopt it.

“We have sent the reference back to Telecom Regulatory Authority of India (Trai) to seek clarity on certain points in the authorisation framework. Once the regulator replies, we will work on finalising the framework for authorisation,” an official privy to the details told ET on condition of anonymity.

While Trai believes the new authorisation regime as recommended by it is much better than the existing licensing system, it will further provide its inputs to the DoT, a second official said.

The telcos had raised concerns over ending the contract system in the new regime, fearing it would lead to uncertainty. The DoT, however, is trying to allay the fears and make the new regime more friendly for all stakeholders.

As of now, the DoT is not looking to force the authorisation regime on telcos through a mandate, but it wants that all the stakeholders should voluntarily migrate to the new system in a time-bound manner.

The DoT believes that the existence of two systems – authorisation and licensing – will create confusion, leaving room for potential litigation.

Officials said the DoT also knows that forcing the telcos through a mandate to adopt the new regime might lead to legal challenges as the tenure of licences can’t be cut short. “The licence is a legal document, and telcos can challenge the DoT in case of cancellation or mandatory migration to the new regime,” the first official said.

The official added that the DoT does not want to force or fight with the industry and that it would rather encourage the players to opt for the new regime at the earliest, based on the benefits.

All telecom firms are currently following the licensing regime and Trai chairman Anil Kumar Lahoti had clarified last year that these firms can continue providing services under the licensing regime if they want to until the validity of their respective licences. However, they won’t be allowed to renew the licence on expiry and must mandatorily opt for the authorisation mechanism.

In the new regime, a company will be authorised to offer services while terms and conditions would be notified separately under the Telecommunications Act. The structure is different from the current regime wherein there is a contract between the DoT and a telecom firm, and all the rules and regulations are part of the contract.

The telcos had expressed unhappiness over the authorisation proposal, fearing that such a move would ring in regulatory uncertainty and undermine investor confidence.

As per the telcos, when an operator gets a licence, all terms and conditions are specified, which allows them to plan their future roadmap. So, even if the government wishes to change certain terms and conditions, it cannot do so unilaterally, and a notice must be given to the telcos first. But this safeguard may be missing in the new regime, and the government may unilaterally change the conditions, operators fear.

The government has tried to allay such apprehensions and assured the companies that proper safeguards will be in place, but it has not agreed to the telcos’ demand of continuing with the contract system.