India’s COAI advocates for contractual telecom licenses

The Cellular Operators Association of India (COAI) has underscored the necessity of preserving the contractual nature of telecom service licenses, particularly amid the impending overhaul of the service authorisation regime. That recommendation arises in response to recent proposals from the Telecom Regulatory Authority of India (TRAI), which aims to introduce three new categories of authorisations under the upcoming Telecom Act, 2023.

COAI contends that upholding a contractual framework is vital, as it ensures uniformity, regulatory certainty, and investor protection, especially for those committing long-term capital to the telecom sector. In discussions with Telecom Minister Jyotiraditya Scindia, COAI stressed that the new authorisations should prioritise broader aspects, such as the application process and eligibility criteria.

Conversely, detailed terms must remain integral to telecom operators and government contracts. The association expressed concerns that deviating from a contractual agreement could lead to regulatory uncertainty, undermining investor confidence. Additionally, COAI emphasised that the Adjusted Gross Revenue (AGR) calculation should encompass only revenues generated from telecom services, a point that TRAI’s recommendations have not adequately addressed.

Moreover, COAI warned that excluding over-the-top (OTT) communication services from the new authorisation framework poses a significant threat to fair competition. While telecom operators are subjected to stringent compliance requirements, OTT services operate with considerably less oversight, which raises concerns about market fairness and national security. Therefore, the association advocates for maintaining the contractual nature of telecom licenses to ensure regulatory consistency and promote competitive fairness within the industry.