TRAI releases recommendations on "Rationalization of Entry Fee and Bank Guarantees"

In order to facilitate the orderly growth of the telecom sector and ease of doing business, TRAI has made recommendations to the government for reducing the entry fees across various license authorizations and the merging of bank guarantees.

By  Storyboard18Sep 19, 2023 2:59 PM
TRAI releases recommendations on "Rationalization of Entry Fee and Bank Guarantees"
The authority has also recommended no entry fee at the time of renewal of license. Such a move will ease the financial burden on existing, as well as new entrants. (Image source: News18)

The Telecom Regulatory Authority of India (ThAI) has issued the recommendations on "Rationalization of Entry Fee and Bank Guarantees". The Department of Telecommunication (DoT), sent a reference to TRAI seeking, inter alia, the rationalization of entry fees and bank guarantees of the various licenses operating in the telecom sector.

Entry fee is a fixed one-time amount that prospective entrants must pay to enter a market. Entry fees are typically non-refundable and constitute start-up costs for a firm. A bank guarantee is a type of financial instrument to safeguard the interests of the government as it ensures that the licensee pays its dues on time and fulfills their obligations as per the terms and conditions prescribed in the license agreement.

A consultation paper on "Rationalization of Entry Fee and Bank Guarantees" was issued by TRAI on 26th July 2022. Written comments and counter-comments on the consultation paper were invited from the stakeholders by 23rd August and 6th September 2022 respectively.

On the request of the industry associations/stakeholders, the last date for submission of written comments and counter-comments was extended up to 6th September and 20th September 2022 respectively. The authority received 20 comments and 1 countercomment from various stakeholders. An open house discussion was also convened on the issues raised in the consultation paper on 9th December 2022 through video conferencing.

In an environment of rapid technological transformation in the telecommunications sector, in order to facilitate the orderly growth of the telecom sector and ease of doing business, TRAI has made recommendations to the government for reducing the entry fees across various license authorizations and the merging of bank guarantees.

It is expected that reductions in entry fee will lead to the entry of new service providers in the market, increase investment and enhance competition in telecom sector. The merging of bank guarantees will encourage ease of doing business and enable licensees to make investments in the sector thereby ushering the growth in the sector. Both these measures will improve the quality of service and enhance consumer welfare.

The authority has also recommended no entry fee at the time of renewal of license. Such a move will ease the financial burden on existing, as well as new entrants, and will be beneficial for UL (VNO) licensees especially.

First Published on Sep 19, 2023 2:57 PM

More from Storyboard18

How it Works

Industry leaders discuss India’s road ahead to become net zero by 2030 at Power of Purpose event

Industry leaders discuss India’s road ahead to become net zero by 2030 at Power of Purpose event

How it Works

MeitY's CERT-In trials anti-deepfake tech to combat AI-driven scams

MeitY's CERT-In trials anti-deepfake tech to combat AI-driven scams

How it Works

Diwali 2024: Mumbai property registrations hit Rs 1,081 cr in October

Diwali 2024: Mumbai property registrations hit Rs 1,081 cr in October

How it Works

Vivo tops smartphone shipments record in Q3 '24 due to festive season

Vivo tops smartphone shipments record in Q3 '24 due to festive season

How it Works

Two lakh kirana stores forced to shut down due to rise of quick-commerce: AICPDF

Two lakh kirana stores forced to shut down due to rise of quick-commerce: AICPDF

How it Works

TRAI intensifies crackdown on spam calls and fraudulent messaging

TRAI intensifies crackdown on spam calls and fraudulent messaging

How it Works

Truecaller urges TRAI to allow telcos to work with third party apps to curb spam: report

Truecaller urges TRAI to allow telcos to work with third party apps to curb spam: report

How it Works

Techie loses Rs 4.35 lakh in Apple Diwali gift card scam

Techie loses Rs 4.35 lakh in Apple Diwali gift card scam