Recently, the Ministry of Communications has released a draft of the Indian Telecommunication Bill, 2022.
The bill was released by the Department of Telecommunication (DoT) under the Ministry of Communication.
It is an attempt by the government to update the extant regulatory framework in keeping with the advancements and challenges in the sector.
It seeks to replace three existing Acts:
Indian Telegraph Act, 1885,
Indian Wireless Telegraphy Act, 1933
The Telegraph Wire (Unlawful Possession) Act, 1950.
The bill looks to repeal these legislations and restructure the legal and regulatory framework” for the telecommunications sector.
Excerpts from the debate
Main provisions of the Bill:
OTT communication services
The current draft of the Bill expands the definition of “telecommunication services” to include OTT communication services.
As per the draft law, providers of telecommunication services will be covered under the licensing regime, and will be subjected to similar rules as other telecom operators.
Amendment of TRAI
To dilute the powers of TRAI which is a recommendatory body, the government has decided to take certain steps:
The current TRAI Act mandates the telecom department to seek the regulator’s views before issuing a new licence to a service provider. The proposed Bill does away with this provision.
The new Bill also proposes to remove the provision where if the DoT cannot accept TRAI’s recommendations or needs modification, it had to refer back the recommendation for reconsideration by TRAI.
To curtail the ever-increasing incidence of spam calls and frauds, the draft Bill proposes that the identity of the person communicating using any form of telecommunication services shall be available to the user receiving such communication.
Imposition of Penalty
To ensure that a user provides correct details, the draft Bill penalises providing wrong identification details with a 50,000 fine and suspending the operation of the specific mobile number or barring the person from using the telecom service for certain duration.
The draft bill allows the TSP to exploit its spectrum resource fully by enabling sharing, trading, leasing, surrendering or returning unutilised spectrum. The Bill also simplifies the process for restructuring, merging or demerging.
Provisions on Internet Shutdowns
For the first time in the Indian legal framework, a specific provision enabling the government to order suspension of internet power has been introduced through the draft Bill.
Powers to the Centre
The draft Bill also accords the Centre powers to defer, convert into equity, write off or grant relief to any licensee under extraordinary circumstances, including financial stress, consumer interest, and maintaining competition, among other things.
Need for the change:
This was much needed given that the three main legislations that occupy this domain are considerably outdated, with the most recent of these having been enacted more than 70 years back. These legislations are:
The Indian Telegraph Act enacted in 1885
The Indian Wireless Telegraphy Act enacted in 1933
The Telegraph Wires (Unlawful) Possession Act in 1950
Challenges in the Telecom Sector:
With the emergence of new technologies, ensuring network security has become another major challenge for telecom operators. New technologies bring in new threats to the security of networks and applications.
Limited Spectrum Availability
Available spectrum is less and the delay in spectrum allocation for 5g technology has delayed the development of this sector. Hence, it is imperative that spectrum auctioning at sustainable prices is the need of the hour.
Financial health of the telecom industry
Gross revenue has dropped drastically in this sector having a sound number of NPAs.
The amount of data telecommunications companies are predicted to have to handle is massive. Tech analyst company IDC predicts there will be 41.6 billion connected IoT devices generating 79.4 zettabytes of data by 2025.
Low Broadband Penetration
Low broadband penetration in the country is a matter of concern and the government needs to do a lot more work in the field to go up in the global ladder.
Bharat Net Project:
Under the BharatNet Project 1, 77,550 Gram Panchayats (GPs) have been made service ready till June 2022. Scope of BharatNet Project has been extended to all inhabited villages in the country.
The objective of the Bharat Net Project is to facilitate the delivery of e-health, e-governance, e-education, internet, e-banking, and other services to rural India.
Prime Minister Wi-Fi Access Network Interface (PM-WANI)
Provision of public Wi-Fi service through Public Data Offices (PDOs) spread across the country to accelerate the expansion of broadband internet services.
Telecom Sector Reforms
In 2021, large scale structural and procedural reforms have been brought in to enhance liquidity and minimise financial stress within the telecom sector.
PLI Schemes under Atmanirbhar Bharat Abhiyan
Production Linked Incentive (PLI) Scheme worth INR 12,195 Cr for manufacturing of telecom and networking products. Incentives worth more than INR 4,000 Cr have been earmarked for the Design Led Manufacturing Scheme of the existing PLI Scheme.
Telecom Sector Reforms
1. Structural Reforms
Non-telecom revenue will be excluded on prospective basis from the definition of AGR.
In future Auctions, tenure of spectrum increased from 20 to 30 years.
To encourage investment, 100% Foreign Direct Investment (FDI) under automatic route permitted in Telecom Sector.
2. For Telecom Service Providers (TSPs)
Option to the TSPs to pay the interest amount arising due to the said deferment of payment by way of equity.
At the option of the Government, to convert the due amount pertaining to the said deferred payment by way of equity at the end of the Moratorium/Deferment period, guidelines for which will be finalized by the Ministry of Finance.
In Union Budget 2022-23 the Department of Telecommunications was allocated Rs. 84,587 crore. To drive the development of 6G technology, the Department of Telecommunications (DoT) has developed a sixth generation.
Revenue from the telecom equipment sector is expected to grow to US$ 26.38 billion by 2020. The number of internet subscribers in the country is expected to double by 2021 to 829 million and overall IP traffic is expected to grow four-fold at a CAGR of 30% by 2021. According to a Zenith Media survey, India is expected to become the fastest-growing telecom advertisement market, with an annual growth rate of 11% between 2020 and 2023.
Over-the-top (OTT) communication services
Over-the-top (OTT) communication services refer to services that provide real time person-to-person telecommunication services.
Some popular platforms like Whatsapp, Telegram, Signal, Messenger, Duo, Google Meet etc. use the network infrastructure of telecom service providers like Airtel, Vodafone and Jio and provide features that compete with telecommunication services such as voice calls and SMS services.
Telecom sector in India:
India is the world’s second-largest telecommunications market with a subscriber base of 1.16 billion and has registered strong growth in the last decade.
Over the next five years, rise in mobile-phone penetration and decline in data costs will add 500 million new internet users in India, creating opportunities for new businesses.
By 2025, India will need 22 million skilled workers in 5G-centric technologies such as Internet of Things (IoT), Artificial Intelligence (AI), robotics and cloud computing.
FDI inflow in the telecom sector stood at US$ 38.33 billion between April, 2000- March, 2022.
Consumer base: India is one of the highest consumers of data per day with approximately 5 hours of daily time spend on smartphones.