India rewrites telecom rulebook, replacing licence contracts with statutory authorisations

New Delhi: The government has notified the Telecommunication (Authorisation for Provision of Major Telecom Services) Rules, 2026, which overhauls the existing contractual licence-based regulatory framework for the telecom industry, for a new unilateral statutory model, rejecting demands for continuing the current regime.

The new model, notified on Tuesday, allows the government to unilaterally grant an authorisation to telecom operators after meeting eligibility requirements, and terms and conditions.

This differs from the current model where a unified licence is executed as a formal, bilateral licence pact between the telecom operator and the telecom department, under which any unilateral modification by the Centre could be challenged in courts or tribunals as a contractual dispute.

Future orders, directions or guidelines issued by the government to telcos will form part of the terms and conditions applicable to authorised entities. The new rules removed the concept of a contractual breach of agreement. Violation of these conditions would now count as a statutory breach of the Telecom Act and not a breach of contract.

Non-compliance will be managed internally through an adjudicating officer and an appeals committee. Telcos can escalate challenges to the Telecom Disputes Settlement and Appellate Tribunal if they are aggrieved by the decisions of the internal appeals committee.

During the consultation phase, telcos opposed migrating to this model stating that the loss of contractual rights brings uncertainty and may harm existing investments. The Telecom Regulatory Authority of India has said telcos are free to operate under the old licensing framework till the validity of the existing licences.

The authorisation mechanism will kick in at the time of renewal. The new rules also clarify the government's definition of adjusted gross revenue, explicitly excluding non-telecom revenues from the calculation.