Three decades on, does India's telecom regulator need a fresh mandate?

In the rapidly evolving telecom landscape, changes are needed to make Trai more agile

The Union Budget of 1997 — known for some bold initiatives — was still a week away when a landmark step was taken for the rapidly evolving telecom sector. The Telecom Regulatory Authority of India (Trai) was set up  on February 20 that year with the objective of creating an independent body to regulate the sector, rather than leaving the government to carry on with the job. 

 

The backdrop was important. Mobile telephony had taken off in 1995, and private players were ready to give competition to government-owned phone service providers, which had landline monopolies for years. The idea was to divide the tasks between the Department of Telecommunications (DoT) and Trai — DoT was to be the overarching policymaker and Trai the principal regulator for the telecom industry.

 

Through the course of the journey, however, the objective with which Trai was constituted appears to have been only partially addressed. To an industry observer, Trai may be a regulator on paper, but it is a recommender for all practical purposes. The DoT is the licensor, the spectrum management authority, the main penalty decision-maker for operators. In other words, a regulator in the real sense.  It also oversees a host of consumer-related issues, including compliance with quality of service norms, and setting rules for recruitment at Trai.

 

At a time when the latest technology forms the backbone of all telecom services and digital has replaced the legacy networks, speed is of the essence in any regulatory exercise. As it is, the regulatory framework in India is fragmented in many tech-related scenarios. For instance, in the case of cybersecurity issues, various agencies including the home ministry, DoT, MeiTy (Ministry of Electronics and Information Technology) and Trai sit in judgement. Another case in point is the latest initiative by WhatsApp to allow consumers to have their names registered so that their mobile numbers remain discreet when messages are sent. This has already prompted the government to order Meta (the parent company of WhatsApp) to pause the service. Multiple ministries and regulators may intervene if the matter picks up. With artificial intelligence perpetually in the background, regulation has to be dealt with maturely — more now than ever before.        

 

Speaking of telecom specifically, having two regulators — Trai and DoT —translates into extended time lags and delays in regulation in the complex digital environment, thereby impacting the industry and the consumer. Going back to the objective of Trai, it was meant to protect consumer interests and ensure the industry’s growth through fair competition and a level playing field. With tech advancements speeding past long-drawn regulatory frameworks, both consumers and industry players could feel short-changed.   

 

Some of the regulatory delays owing to decisions going back and forth between the regulator and the government can be avoided if the processes are streamlined. Preventing spam calls and unsolicited communication is one example of a regulatory framework going through many versions over the years. It has still not helped consumers, and the industry is left guessing on the next best move.

 

A major trigger for the birth of Trai in 1997 was the belief that there could be a conflict of interest if the government, with ownership in Mahanagar Telephone Nigam Ltd and Videsh Sanchar Nigam Ltd, continued to regulate a space that had been opened for private players. Currently, besides state-owned Bharat Sanchar Nigam Ltd and MTNL, the government owns 49 per cent in Vodafone Idea too. Although the government is not classified as a promoter of Vodafone Idea, there could be concerns about conflicts of interest as the government continues to be the licensor.

 

Trai’s need for greater powers can be understood better against the backdrop of some of the prominent international regulators. The Federal Communications Commission of the United States (set up in 1934), the Office of Communications or Ofcom of the United Kingdom (set up in 2003), Australian Communications and Media Authority (established in 2005), among others, are comprehensive regulators and power centres in telecom for everything from licensing to spectrum management.   

 

From 1997 to now, the telecom landscape in the country has transformed. In February 1997, when Trai was set up, the total telephone subscriber base in India was recorded at 14.88 million, of which cellular mobile services accounted for only 0.34 million. The teledensity was pegged at 1.5 per 100 people. At last count, in 2026, the telephone subscriber base was at 1.34 billion, of which the mobile users were at 1.294 billion. A little less than 30 years on, the overall teledensity had zoomed to 94.02 per 100 people.

 

In changing times such as these, the regulator too could do with an overhaul. In its lifetime, there have been two amendments to the Trai Act — one in 2000 to separate the regulatory and dispute settling functions of the Authority. It was then that the Telecommunications Dispute Settlement and Appellate Tribunal (TDSAT) was set up. The second amendment was in 2014 to change the rule that barred former Trai chairpersons and whole-time members from taking up future employment with the government.        

 

Trai’s need for empowerment is not a breaking story, it’s been a point of discussion for years. Since 1997, when the regulatory authority was set up, it has had nine chairmen. Before the tenth chairman is appointed, likely in 2027, a review of the powers of Trai may not be a bad idea. A third amendment of the Trai Act perhaps?