New telecom bill may further dilute regulator's power, fear ex-officials

Former officials of the Telecom Regulatory Authority of India (Trai) and the Department of Telecommunications (DoT) have said if the draft telecom bill in its current form becomes law, it could further dilute the sector regulator's powers.

Such a scenario, they cautioned, could potentially weaken the regulatory environment, lead to greater government interference in policy making, hurt consumer interests and even lead to a decline in quality of telecom services.

"Trai's regulatory powers are already far less than those of Ofcom and other global counterparts in the US, Europe or even in Pakistan, and if the draft telecom bill leads to a further curtailment of its powers, it would be a retrograde step as a toothless telecom regulator would not be in the interest of consumers or the industry and would also impact investor confidence in future," Sudhir Gupta, former Trai secretary, told ET.


Big tech companies have already voiced their misgivings about the draft telecom bill, saying it threatens to rob the regulator of its statutory independence and make it subservient to the government. This is since the draft bill calls for deleting provisions around regulatory safeguards under Section 11 (1) of the Trai Act that enable proper checks and balances. The bill seeks to reduce Trai's powers from a regulatory to just a recommendatory body.

Ram Narain, a former senior DDG (security) in DoT, said the government should ideally take steps to further empower Trai rather than curbing its powers as it would minimise interference, lead to more holistic policy making and ensure a stabler regulatory environment in the sector.

He, though, underlined the need for a seasoned telecoms professional to lead Trai. "It's important that Trai's chairperson is an experienced telecom professional with high integrity, and that the members assisting him in regulatory work also have deep domain knowledge, if Trai is to truly function as an independent telecom regulator," he said. Narain, in fact, said if Trai is not led by a telecom professional, it may be unable to function effectively as a regulator, and from that perspective, DoT may do a better job in the near term as it has parliamentary oversight and would be more accountable for its actions.

A top executive of a Big 3 telco, though, said any move to clip the Trai's wings is bad for both the industry and consumers, particularly from a mobile services perspective. "It will undermine the sanctity of telecom regulation, which could have grave consequences for the industry since Trai, in its current role of independent regulator, is responsible for ensuring a level-playing field in the sector, protecting consumer interests and ensuring fairness and transparency in tariff determination," he said

Separately, analysts expect the draft telecom bill to pave the way for more relief to Vodafone Idea (Vi) as it allows the government to partially or fully write-off or defer dues in cases of payment defaults in extraordinary circumstances.

"The bill allows the government to provide relief via partial/full write-off or deferment of dues or conversion into shares in cases of payment default in extraordinary circumstances... This could be positive for Vi if the government decides to waive some of its dues in future," JM Financial said in a note.

Analysts, though, don't expect the government to immediately exercise such powers as long as Vi has non-government stakeholders.


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