The Telecom Regulatory Authority of India (TRAI) has released its recommendations regarding the “Rationalization of Entry Fee and Bank Guarantees” in the telecom sector.
The Department of Telecommunication (DoT) requested TRAI’s input on the rationalization of entry fees and bank guarantees for various licenses operating in the telecom sector, as per their letter no. 20-577/2016-AS-I Vol.III dated March 3, 2022.
Entry fees are one-time payments made by prospective market entrants, while bank guarantees serve as financial instruments to ensure compliance with license terms. TRAI initiated a Consultation Paper on this matter on July 26, 2022, seeking input from stakeholders. Written comments and counter-comments were solicited until September 6, 2022. The Authority received feedback from 20 stakeholders.
In light of rapid technological advancements in the telecom sector and to promote industry growth and Ease of Doing Business, TRAI’s recommendations aim to reduce entry fees for various license categories, merge bank guarantees, and waive entry fees during license renewal. These measures are expected to foster market competition, attract investments, improve service quality, and enhance consumer welfare.
Key recommendations include:
- Reduction of entry fees for Unified License (UL) and Unified License (Virtual Network Operator) (UL (VNO)) licenses.
- No entry fees for certain license categories such as M2M, Audio conferencing, Audiotex, Voice mail service, and ISP “C.”
- Rationalization of entry fees for various UL authorizations, including Access Service, NLD and ILD, PMRTS, ISP “B,” and ISP “A.”
- Substantial reduction in entry fees for UL (VNO) authorizations.
- Elimination of entry fees during license renewal.
- Merging Financial Bank Guarantee (FBG) and Performance Bank Guarantee (PBG) into a single Bank Guarantee for Unified License and Mobile Number Portability licenses.
- Adoption of electronic bank guarantees (eBG) for enhanced ease of doing business.
The complete recommendations document on “Rationalization of Entry Fee and Bank Guarantees” is available on TRAI’s website at www.trai.gov.in. For inquiries or clarification, please contact Shri Amit Sharma, Advisor (F&EA), at [email protected] or +91-11-23234367.
