"Spare the Regulation and you spoil the Corporation" – C.A.A. Savistano

Every sector requires a proactive regulator to thrive as well as be able to maintain a balance and achieve its purpose. Specifically, for a sector as vast and dynamic as the Indian telecom sector, an adequate regulator, with appropriate powers & responsibilities, is essential. In light of this, we examine the Telecom Regulatory Authority of India ("TRAI"), the designated body regulating the Indian telecom sector for the past 25 years, its existing role & responsibilities, the changes that the Government of India has proposed with respect to TRAI's role in the telecom sector and finally, what role, in our opinion, should TRAI be playing in order to efficiently regulate the Indian telecom sector.

The present role of TRAI as a regulator of Indian telecom sector:

The telecommunications sector has been at the forefront of India's technological growth, ushering in new advancements and enabling exponential innovation. To ensure that advancements in the telecom sector are consistent and is keeping up with the fast-paced technological landscape, TRAI was established via Section 3 of the Telecom Regulatory Authority of India Act, 1997 ("TRAI Act").

The TRAI's functions are derived from Section 11 of the TRAI Act, which highlights four primary categories – recommendary functions, regulatory functions, fixing tariffs, other functions as prescribed by the Central Government. These are discussed in brief below:

As per the TRAI Act, TRAI either on its own or on the request of the Department of Telecommunications ("DoT") can make recommendations to the DoT on certain subject matters. These recommendations could pertain to, among other things, introduction of new Telecom Service Providers ("TSPs"), terms and conditions of licensing, revocation of licenses following non-compliance of regulations, how to create a healthy competitive sector, specifics of equipment to be used and effective spectrum management. It is pertinent to note that while the DoT is required to seek recommendations from TRAI with regards to need and timing of new TSPs as well as terms and conditions of TSP licenses, any recommendations made by TRAI are not binding on the DoT. TRAI is obligated to provide these recommendations, within sixty (60) days of DoT's request and may further request the DoT to provide relevant information which the DoT is required to furnish within seven days of receiving such request. If the TRAI fails to deliver a timely recommendation, the DoT may take a decision without such recommendations. . If the DoT believes that recommendations provided by TRAI are inadequate or need modification, the DoT is required to send them back to TRAI for reconsideration, which in turn is obligated to respond within fifteen days. Pursuant to the reconsideration, the TRAI can either send modified recommendations, or send the same recommendations back to DoT.

In addition to the above, the TRAI has the responsibility to ensure compliance of terms and conditions of telecom licenses granted by the DoT under section 4 of the Telegraph Act, 1885 ("Telegraph Act"), fix terms and conditions of interconnectivity of TSPs, lay down framework for income sharing between TSPs, set out standards of quality of service, maintain a log of all interconnection agreements, and ensure compliance of universal service obligation.

Moreover, the most key function of TRAI is derived from Section 11(2) of the TRAI Act, where TRAI has been entrusted with the responsibility of determining tariffs to be levied via establishing the rates at which telecom services will be provided within India as well as abroad, including the rates at which messages shall be transmitted to any country outside India.

What is Proposed:

The Ministry of Communications ("Ministry") has recently released the draft Indian Telecommunications Bill, 2022 ("Draft Bill, 2022") which will govern the telecommunication sector in India. The Draft Bill, 2022 was prepared based on the feedback received from industry stakeholders on the consultation paper released by the DoT, in July 2022. It proposes to repeal the Telegraph Act, the Indian Wireless Telegraphy Act, 1933 and the Telegraph Wires (Unlawful Possession) Act, 1950. As such, it additionally seeks to propose a new framework that would govern TRAI, altering its functions, purpose, and efficacy.

Some of the main objections relating to the proposed changes in the Draft Bill, 2022 are given below: -

  • It proposes that the DoT will not be bound to seek recommendations from TRAI on matters relating to the need and timing for introduction of new service provider and terms and conditions of license to a service Instead, it will be at the discretion of the DoT to seek or not to seek such recommendations from TRAI.
  • The Draft Bill, 2022, vide section 46, repeals provisions that mandate DoT to seek recommendation from TRAI, before deciding certain matters. In doing so, the Central Government is empowered to make decisions on licensing without TRAI input, effectively rendering their power of recommendation meritless, further weakening an already weak regulatory body. The Draft Bill, 2022 further proposes that the DoT may not send recommendations back to TRAI for re-consideration in case DoT disagrees with such Furthermore, it is proposed that in case the TRAI requests, DoT may decide not to provide any information or documents required by TRAI to provide its recommendations.
  • The Draft Bill, 2022 also proposes to substitute the phrase 'Notwithstanding anything contained in the Telegraph Act' with 'in consonance with the Indian Telecommunication Act, 2022', in section 11(2) of the TRAI Act. The existing legal framework gives TRAI the absolute power to determine tariffs of telecommunication The phrase 'Notwithstanding' at the start of section 11 of the TRAI Act gave TRAI the overriding power to make determinations on matters of tariff, hence preventing the DoT from interfering with the same. The Draft Bill, 2022 aims to remove this overriding effect, effectively rendering TRAI without such power.
  • Currently, TRAI is regulating the 'Do Not Call registry', However, the Draft Bill, 2022 proposes to give this power to the DOT.

What it should be:

The Draft Bill, 2022 proposes to substantially dilute the existing powers and functions of TRAI. There is a strong case to strengthen the role of TRAI by giving it more powers as is held by other regulators such as the Reserve bank of India ("RBI"), Security Exchanges Board of India ("SEBI"), IRDA, among others, in their respective sectors. Diluting TRAI's existing powers will make it irrelevant and toothless and has potential to disturb the equilibrium in the sector. An efficient and effective regulator maintains checks and balances and ensures that the different bodies/stakeholders involved, fulfil the functions entrusted on them, appropriately. An independent and autonomous regulator brings predictability and certainty in formulating regulations and these decisions are based on economic principle rather than political expediency.

Having said the aforementioned, the DoT's desire to consolidate all telecommunication regulations under one comprehensive framework is indeed with merit. Cleaning up and organizing an unorganized legislative landscape into a concise and accessible framework is indeed the need of the hour. However, it is equally imperative to have a robust regulator in place. Repealing old, archaic legislations, framing a consolidated framework for the telecom sector, can co-exist with upholding and even strengthening and augmenting the powers of TRAI, instead of diluting those powers further.

While envisioning an effective regulator, it would be beneficial to understand which powers should be conferred upon the government body and which ones upon the regulatory body. The telecommunication sector in India has been deriving its structure largely through policy rather than through law, which allows the DoT to consistently evolve and establish rules for a rapidly changing technological landscape. The fact that such policy does not need to be passed by Parliament leads to efficient and progressive rule making. However, the determination of policy can potentially be mired in political bias as the beliefs of the regime in power inevitably seep into the language and ethos of policy. The solution is a strong regulatory body. A body that is not subject to political whims or pressures, but rather takes decisions pertaining to the telecommunications sector, based on hard facts, economic metric and empirical data. If we want the Indian telecommunication sector to encourage healthy and free competition, a strong regulator that exercises independent power over entities within the sector is critical.

To achieve the aforementioned, we must at least maintain the present position of TRAI in the TRAI Act, 1997 relating to its recommendatory and tariff setting powers. The DoT and TRAI must not be seen as combative or oppositional, rather they should work together in the interest of citizens, consumers and the health of the telecom sector as a whole. As such, there must be no restriction on information sharing between the two, and if TRAI requires information to make certain recommendations, then DoT should be required to provide such information in order to lead to robust and comprehensive recommendations and subsequently, policy creation.

The very essence of TRAI is its ability to determine tariffs for TSPs and it does so while keeping in mind the interests of the consumers and all the stakeholders involved. TRAI has adopted a very flexible approach on fixing tariff of telecom services like policy of forbearance subject to checks and balances, and such policy has an important role to play in making the tariffs of telecom services in India as being the cheapest in the world. It is imperative that this power remains unequivocally in the purview of TRAI. Additionally, the adjudicatory body that resolves disputes between the Government and private TSPs must be consolidated in a single, strong body, as we presently have, in the form of Telecom Disputes Settlement and Appellate Tribunal ("TDSAT"), and this must not be made subject to Government oversight. If the Draft Bill, 2022 grants the DoT the power to prescribe alternate appellate authorities for dispute resolution, other than the one prescribed under law, it could lead, not only to confusion and uncertainty, but also to the dilution of the separation of powers.

Additionally, it is imperative that TRAI is given more powers and teeth, taking inspiration from international jurisdictions and other markets/sectors of India, so that the Indian telecom sector is balanced, regulated and free of any bias, whims and fancies of the stakeholders involved.


In light of the aforementioned, we suggest that the essence of TRAI as an efficient and effective regulator should be maintained for the sake of the entire telecom infrastructure in India. The legislature must, while consolidating the revamped legal framework for the Indian telecom sector, keep this requirement in mind, and it is imperative that the Indian Telecommunications Act, 2022 be a legislation that strengthens TRAI as a regulator, rather than weaken its existing role. In our opinion, this will maintain a balance, and will be fruitful and productive for the nation.

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