On 24 December 2023, the Telecommunications Act, 2023 (“New Act”) received Presidential assent. Subsequently, specific sections of the New Act came into effect on 26 June 2024, and 5 July 2024, vide notifications dated 21 June 2024 and 4 July 2024, respectively. The New Act aims to modernize the historical, legal and regulatory framework governing the telecommunication sector, and in doing so, will repeal the existing Indian Telegraph Act, 1885 and the Indian Wireless Telegraphy Act, 1933.

Below is a summary of key provisions of the New Act and their potential implications:

Scope of Services:

Previously: The definition of ‘telecommunication services’ was primarily limited to traditional telephony and basic internet services.

New Act: The definition has been significantly broadened to encompass a wide range of activities and technologies. ‘Telecommunication’ now includes the transmission and reception of any messages by wire, radio, optical or electromagnetic systems. As a result, internet-based communication services, such as Voice over Internet Protocol (“VoIP”), messaging apps, and other Over-the-Top (“OTT”) services, may potentially now fall within the scope of telecommunication services.

This is a significant departure from earlier regulations that were primarily focused on traditional voice and data transmission. By way of background, the earlier draft of the Telecommunication Bill expressly included OTT within the definition of ‘telecommunication service’, which received extensive criticism. Although the New Act does not expressly include OTT within the definition of ‘telecommunication service’, the broad definition of ‘telecommunication’ under the New Act results in inclusion of OTT within its ambit. As such, it is essential to closely monitor whether OTT are included within the regulatory regime of the Department of Telecommunications (“DoT”), or if it continues to be regulated by the Ministry of Electronics & Information Technology.

Authorization:

Previously: Separate licenses were required for different services (e.g., internet service provider, mobile operator, long-distance operator).

New Act: The license requirement has been renamed as ‘authorization’, and the scope of telecommunication services requiring authorization has been extended. Under the New Act, an expansion of telecommunication network would also require specific authorization.

It is pertinent to note that while the relevant provisions in relation to the authorization process have not yet been notified, once they are in effect, a license, registration or permission (by whatever name called) granted under the Indian Telegraph Act, 1885 or the Indian Wireless Telegraphy Act, 1933, prior to the effective date, in respect of provision of telecommunication services or telecommunication network, will remain valid as per the original definite validity period. If there is no definite validity period, then such licenses/registrations/permission will be valid for a period of five years from the date notified by the DoT.

On 11 July 2024, the Telecom Regulatory Authority of India (“TRAI”) issued a consultation paper seeking stakeholder comments on the ‘Framework for Service Authorisations to be granted under the Telecommunications Act, 2023’.

 Pursuant to this, stakeholder comments have been sought on various matters including:

1. whether there is a need for introducing a unified service authorisation at the national level for the provision of end-to-end telecommunication services with pan-India service area;
2. comments regarding the validity, scope, terms and conditions which should be applicable in case of a unified license;
3. whether there is a need for including the provision of leased circuits/ virtual private networks within the scope of internet services;
4.  combining the scope of National Long Distance and International Long Distance service authorizations under a single authorisation;
5. clubbing the scope of the extant IP-I registration and digital connectivity infrastructure provider (“DCIP”) authorization (as recommended by TRAI) under a single authorisation.

Given that, currently, the interplay between this new regime and the existing IP 1 registration system (which is valid indefinitely), as well as other service providers (who do not require a registration or license since June 2021), remains unclear.

Right of Way (ROW):

Previously: The construct of ROW allowed telecommunication service providers (“TSPs”) to lay cables, install equipment, and establish infrastructure on public and private land. In relation to this, TSPs were required to obtain permission from the relevant local authorities before exercising their right of way on public property.

New Act: The new regime attempts to streamline the legal framework that will allow telecommunications companies to access and use public and private land for the installation, maintenance, and operation of telecommunications infrastructure, such as cables, towers, and other equipment. This access is essential for ensuring the widespread deployment of telecommunications services, including broadband and mobile networks. The New Act defines a facility provider as the ‘central government or authorised entity including contractor or sub-contractor or agent working for the central government’. The New Act prescribes that ROW being granted to a facility provider will be on a ‘non-discriminatory’ and ‘non-exclusive’ basis.

In this regard, DoT published the draft ‘Telecommunications Right of Way Rules, 2024’ on 9 July 2024 for comments from stakeholders (setting out the application process, timelines, fees, etc.). The draft rules are broadly in line with the Indian Telegraph Right of Way Rules, 2016 prescribed under the erstwhile telecom regime (Indian Telegraph Act of 1885).

Having said that, under the draft rules, in case of private land:

1. an agreement executed between a facility provider and a third party is not required to be registered under the Registration Act, 1908;
2. in case of establishment of mobile towers or poles over such private land, the facility provider will be required to submit identified information with the DoT/public entity elected by the DoT, which inter alia includes, building details, certification from structural engineer, etc.;
3. if the private landowner and the facility provider fail to mutually conclude the commercial terms, then the facility provider will have the option to request the relevant officer to intervene for a determination on whether such ROW is necessary in the public interest.

 Miscellaneous:

Extra-territorial: The New Act extends its jurisdiction to telecommunication services undertaken outside India that involve a telecommunication service provided in India, or telecommunication equipment or telecommunication network located in India. This includes companies that operate or offer services over the internet, which can be accessed by Indian users. This is a significant shift from the erstwhile regime, as the New Act aims to provide a comprehensive regulatory framework that safeguards the interests of Indian consumers and the integrity of the telecommunications network, regardless of where the service providers are based.

Spectrum Allocation and Management: Changes to spectrum allocation policies aim to improve the efficiency and fairness of spectrum distribution. This may affect spectrum usage and licensing fees for telecommunications providers.

Enhanced Consumer Protections: The New Act mandates comprehensive consumer protection measures, including detailed requirements for data privacy and security, transparent billing, and service quality standards, with providers required to implement robust measures to protect consumer data in the digital age by implementing security standards. This may significantly impact the existing monitoring process undertaken by various telecom service providers while providing data centre services or cloud services to its customers.

Penalties/Offences: The New Act imposes severe penalties that are both cognizable and non-bailable. The offences inter alia include providing unauthorized telecommunication services, establishing an unauthorized telecommunication network, damage to critical telecommunication infrastructure, unauthorised access to a telecommunication network or data of an authorised entity or transfer of data of an authorised entity, unauthorised possession or use of any equipment that blocks telecommunication, unauthorised possession of radio equipment, etc.

Adjudication Process: The New Act intends to consolidate regulatory authority under fewer departments, creating a more centralized and streamlined approach to handling disputes and regulatory issues. Further, civil courts will cease of have jurisdiction over matters which are delegated to designated officers/committees under the New Act.

Authors – Gautam Saha – Joint Managing Partner and Punita Gupta – Partner

Disclaimer: This alert only highlights key issues and is not intended to be comprehensive. The contents of this alert do not constitute any opinion or determination on, or certification in respect of, the application of Indian law by Talwar Thakore & Associates (TT&A). No part of this alert should be considered an advertisement or solicitation of TT&A’s professional services. This communication is confidential and may be privileged or otherwise protected by work product immunity.