The Cellular Operators Association of India (COAI) has voiced its disapproval of the Telecom Regulatory Authority of India’s (TRAI) recent recommendations regarding the framework for service authorizations under the proposed Telecommunications Act, 2023.
COAI, whose members include telecom operators such as Bharti Airtel, Vodafone Idea, among others, has expressed concerns that TRAI’s suggestions overlook key industry challenges and could undermine investor confidence, regulatory certainty, and the operational stability of the sector.
At the heart of COAI’s criticism is TRAI’s recommendation that the Central Government should grant service authorization under Section 3(1) of the Telecommunications Act, 2024, instead of continuing the existing contractual agreements between the Department of Telecommunications (DoT) and telecom operators.
COAI argues that the current licensing system, which has been in place for more than three decades, has brought substantial investments and sustained sector growth. Changing this system could destabilize the industry, the association said.
COAI highlighted TRAI’s failure to address financial relief measures, including the reduction of license fees and the abolition of the Universal Service Obligation Fund (USOF), which telecom companies have long sought to reduce from 5 percent of Adjusted Gross Revenue (AGR). Indian telecom operators have reported 8.24 percent increase in AGR to Rs 270,504 crore in fiscal 2023-24.
COAI also raised concerns about the lack of reforms to simplify telecom operators’ revenue calculations and unaddressed calls to remove certain bank guarantees.
The association further criticized the exclusion of Over-the-Top (OTT) communication services from regulatory oversight under the new framework, arguing that it creates an uneven playing field. OTT services are not subject to the same stringent compliance and security requirements as traditional telecom service providers (TSPs), potentially undermining national security and customer privacy.
The size of the India OTT market is projected to grow from $234.9 billion in 2023 to $836.5 billion by 2032, exhibiting a CAGR of 17.20 percent during the forecast period of 2023 – 2032.
COAI also voiced concerns about the expansion of Internet Service Providers’ (ISPs) rights under the proposed framework, which could negatively affect Access and National Long Distance (NLD) operators that have made significant investments in their operations.
COAI has reiterated its commitment to working closely with the government to address these issues and ensure a fair, sustainable environment for telecom operators to continue growing in India’s rapidly evolving digital business. India’s digital economy is growing at 2.8 percent per annum and is expected to reach $1 trillion by 2027-28.
