Ringing in change

The Telecom Regulatory Authority of India’s recommendations on ease of doing business addresses key bottlenecks faced by operators and service providers. A majority of the existing policies, guidelines and regulations were written when the telecom sector was opened up for private sector participation in the 90s. These rules may have been relevant then but they are not anymore. With the industry maturing and with changes in technology, what we now need is light touch regulation. For example, telecom operators still need licences to import network equipment. This is a major bottleneck as getting a licence takes up to 1-2 months. The objective of an import license was merely to ensure that the department of telecom is informed of the details of imported equipment for security reasons. This can now be easily done by asking the operators to submit periodic reports on imported equipment.

Similarly, approvals for merger and acquisition deals in the sector take a lot of time even after the companies involved have completed all the formalities. There are several obstacles that make it tough for telecom businesses in India. TRAI has identified 12 areas where the existing rules need to be changed including streamlining the process for imposing penalties on telecom companies and a fixed time-frame for merger and acquisition deals. While these changes will help telecom operators run their businesses more efficiently, the real issue could be the implementation of these proposals as it would require a major overhaul of the existing regulatory structure. There are multiple bodies within the telecom department that are responsible for these activities and often there is lack of coordination between them. What complicates the structure further is that licensing power is with DoT while dispute settlement power is with the Telecom Dispute Settlement Appellate Tribunal. TRAI has only a recommendatory role with some powers to enforce licence terms and conditions. This division of power has led to complications with one arm not agreeing with the other on several occasions. There have been proposals in the past, including by the Justice Shivraj V Patil committee, to streamline the operations of the various regulatory units in the sector. Over the years, governments have discussed the Communications Convergence Bill which envisages the creation of a ‘super regulator’ for the telecom and broadcasting sectors. The main aim was to establish a single regulatory and licensing authority with defined powers, procedures and functions and an appellate tribunal. However, these proposals remain on paper.

If the Centre is serious about improving the ease of doing business in the telecom sector it should go beyond the changes proposed by TRAI and look at a major overhaul of the overall policymaking edifice. The telecom sector is the backbone to the Digital India vision and it deserves an enabling regulatory environment.

COMMENT NOW