Telecom Licensing

Telecom services were licensed under the Indian Telegraph Act, 1885, granting the government authority to issue licenses for telecommunication services. Until 1993, telecom services were provided solely by the public sector. The National Telecom Policy (NTP), 1994, paved the way for private sector participation under a fixed license regime. 

In 1999, the New Telecom Policy shifted the licensing regime from fixed fees to a revenue-sharing model, where operators were required to pay a percentage of their Adjusted Gross Revenue (AGR) as license fee.  

In 2001, the government introduced the Communication Convergence Bill, proposing a new structural mechanism to deal with the emerging convergence in telecom, IT and broadcasting. However, it never saw the light of day.  

In 2003, the government introduced the Unified Access Service Licensing (UASL) permitting operators to offer both fixed and mobile services under one license. 

In 2007, DoT permitted issuance of licenses on dual technologies – CDMA and GSMA. It also allowed a single license to Internet Service Providers (ISP) but restricted Voice over Internet Protocol (VoIP).  

In 2011, the government permitted Mobile Number Portability (MNP). This allegedly intensified competition by allowing users to retain their numbers while switching providers. 

In 2012, spectrum was delinked from licenses. The Unified License (UL) regime, introduced in 2013, consolidated telecom services under a single licensing framework, allowing operators to provide multiple services, including internet, mobile, and satellite communications. Over time, this facilitated significant mergers, such as the Vodafone-Idea merger, and enabled Reliance Jio to disrupt the competitive landscape. 

In 2016, the Virtual Network Operator (VNO) License (UL-VNO) was introduced under the Unified License, allowing operators to offer services without owning network infrastructure. The UL_VNO Category B License, introduced in 2018, allows VNOs to operate in specific districts, permitting flexibility and reducing entry barriers.  

The National Digital Communications Policy (NDCP), 2018, introduced a forward-looking approach to telecom licensing encouraging differentiated licensing for infrastructure and service layers.  

In 2022, the government released the Draft Indian Telecommunication Bill, 2022, to replace the century old law and repurpose it to new technologies and demands of India’s telecom sector. The Telecommunications Act received the presidential assent in December 2023. Sections 3 of the Act lays down powers of authorization and assignment.   

TRAI issued a consultation paper in 2023 that proposed creating a separate service category – Digital Connectivity Infrastructure Provider, to streamline licensing, attract investments, and enhance infrastructure sharing, ultimately supporting the rollout of 5G, IoT, and other emerging technologies. It also issued another consultation paper on Terms and Conditions for PMRTS and CMRTS Licenses 

In September 2024, TRAI issued two consultation papers – Framework for Service Authorisations to be Granted Under the Telecommunications Act, 2023 and The Terms and Conditions of Network Authorisations to be Granted Under the Telecommunications Act. Subsequently, it issued recommendations that divided service authorisation into three categories – main service authorisations, auxiliary service authorisations and captive service authorisations.