The Telecom Regulatory Authority of India (TRAI) has proposed major changes that are meant to improve conditions for new and existing players in the telecom industry…
TRAI has recommended reducing telecom service license entry fees and merging bank guarantees to boost the telecom sector. These proposals aim to improve industry conditions for new and existing players. TRAI recommended halving the entry fee for Unified Licenses (UL) related to access services in a comprehensive set of recommendations. This proposal and the merger of bank guarantees and other measures should help the telecom sector grow orderly.
TRAI believes these measures will boost telecom industry investments, growth, service quality, and consumer welfare.
The TRAI release lists the proposed changes:
Entry fee for Unified Licenses for access service would be reduced from Rs 1 crore to Rs 50 lakh per telecom circle or metro area. The fee for Jammu & Kashmir and the North East would drop from Rs 0.5 crore to Rs 25 lakh.
National and International Long Distance: TRAI suggests lowering entry fees from Rs 2.5 crore to Rs 50 lakh.
PMRTS entry fee would drop from Rs 50,000 to Rs 20,000 per telecom circle or metro area.
For National Area Internet Service Providers (ISPs), TRAI recommends lowering the entry fee from Rs 30 lakh to Rs 10 lakh.
ISP Category B: Entry fees decrease from Rs 2 lakh to Rs 50,000 for each telecom circle and to Rs 25,000 for Jammu and Kashmir and the North East.
TRAI also proposes eliminating entry fees at license renewal to reduce financial burdens on existing and new licensees, particularly UL (VNO) licensees.
TRAI recommends combining the Financial Bank Guarantee (FBG) and Performance Bank Guarantee (PBG) into one Bank Guarantee to secure dues, ensure license compliance, and guarantee performance under the license agreement. For the Mobile Number Portability license, TRAI recommends merging bank guarantees and submitting electronic bank guarantees (eBG) for efficiency.
New service providers, investments, competition, and improved telecom service quality are expected from these changes, according to TRAI. The merger of bank guarantees is expected to ease business and boost industry growth, benefiting consumers.
Prospective telecom licensees pay a one-time entry fee to enter a market. Bank Guarantees protect the government by ensuring licensees pay on time and fulfill their obligations as per the license agreement.
Conclusion
The Telecom Regulatory Authority of India (TRAI) has proposed reducing telecom service license entry fees and merging bank guarantees to boost the telecom sector. The proposed changes aim to improve industry conditions for new and existing players. The merger of bank guarantees and other measures is expected to help the telecom sector grow orderly. The entry fee for Unified Licenses related to access services would be halved. The proposed changes include lowering Unified License entry fees for access services from Rs 1 crore to Rs 50 lakh for each telecom circle or metro area and National and International Long Distance entry fees. The TRAI also suggests eliminating entry fees at license renewal to reduce the financial burden on existing and new licensees, particularly UL (VNO) licensees. The merger of bank guarantees is expected to ease business and boost industry growth, benefiting consumers.
