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"India has become the world’s second-largest telecommunications market with 1.2 billion subscribers, driving the need for robust legislative frameworks to support growth, digital inclusion, and advancements in manufacturing and R&D."
India has emerged as the world’s second-largest telecommunications market, with a massive subscriber base of about 1.2 billion and an increasing population of internet users. Over the years, the government has also promoted digital infrastructure and digital inclusion in the country through several policy measures and initiatives to fuel growth in the sector. As the sector continues to invest in telecom infrastructure and new technologies, there is now more impetus to strengthen manufacturing and R&D capabilities in the country. With such a large customer base and communications being a critical asset of the economy, it is important to have a robust legislative and governance framework that keeps pace with the changing business environment, market needs and threat landscape.
Over time, the industry has raised various demands around allocation of spectrum, ease in RoW, governance of OTT platforms, relaxation of USOF and other levies, etc. and the regulator has engaged in extensive consultations with industry players and their representative bodies on these matters before defining the rules and regulations. Some of the significant recent developments in the regulatory environment include the overhauling of the Telecom Act, revamping the Quality of Services standards, introducing stringent cybersecurity and anti-spamming measures.
Some of the notable provisions of the Telecom Act 2023 that have come into effect include user protection measures, safeguarding provisions to manage national security and a regulatory sandbox to spur innovation & growth, while certain sections viz. spectrum allocation (re-framing, harmonization, utilization) and adjudication provisions, are still to come into force. While the introduction of this new legislation is a landmark move, marking an end to the archaic acts that have been governing the industry, there are significant matters that still need work to address the ambiguity that prevails around it. Aspects around the transition from the current license regime to the authorization framework; LSA-based service networks vs. unified service pan-India authorization; and the nature of entities and services that should be governed under the legislation to ensure a level playing field across various players are a few such examples. As the government carries through these much-needed legislative reforms, it is imperative that principles of consistency and stability in policy making are maintained to avoid erosion of investors’ confidence. Some of these changes, if executed well, would enable operational efficiencies, ease compliance burden and enhance customer protection and national security. However, some of the industry/ citizens’ concerns around business disruptions, compromising privacy, state overreach should be examined closely while shaping the legislative framework.
On another note, while the industry is facing challenges such as SIM card frauds and phishing attacks that pose significant threats to the society, the growing number of devices and data-driven services would continue to drive the demand for better infrastructure. The rollout of new-age networks would require operators to sustain infrastructure investments. The regulator has been undertaking measures in these areas, particularly at curbing the nuisance of spam/ fraudulent communication and improving the quality of service. While these measures are critical to safeguard public interest and bring transparency for customers to make informed choices, the modalities around aspects such as the consent mechanism, expanding coverage to self-regulated organizations, etc. can be tweaked to make it conducive to business.
Overall, India’s telecommunications sector stands at a crossroads as it navigates a complex landscape shaped by regulatory developments, technological advancements, and emerging trends. While the recent regulatory changes provide a solid foundation for the future, operators would have to adapt to evolving trends while simultaneously working out strategies to overcome challenges and seizing opportunities offered by this dynamic industry. Ultimately, fostering a sustainable telecommunications ecosystem will benefit both consumers and operators alike.
This article first appeared in the Financial Express on 15 October 2024.