TRAI releases new recommendations for Digital Communication Sector
TRAI releases recommendations
on “Encouraging Innovative Technologies, Services, Use Cases and Business
Models through Regulatory Sandbox in Digital Communication Sector”
Telecom Regulatory Authority of India (TRAI) today released its
recommendations on “Encouraging Innovative Technologies, Services, Use Cases,
and Business Models through Regulatory Sandbox in Digital Communication
Sector”. In view of new technological developments in 5G/6G, Machine to
Machine Communications, Artificial Intelligence, the Internet of Things,
Virtual Reality, and others, there is a need to provide an environment in which
new technologies, services, use cases and business models can be tested in live
networks, or existing functions or processes can be refined. To address this
pressing need, the Department of Telecommunications wrote to the Telecom
Regulatory Authority of India on March 10, 2023, requesting, TRAI’s
recommendations regarding a regulatory sandbox framework for new services,
technologies, and business models in the digital communication industry.
In consideration of the DoT reference, the TRAI published a Consultation Paper
(CP) on June 19, 2023, inviting feedback from stakeholders.
Regulatory Sandbox (RS) makes real-time but regulated access to telecom
network and customer resources, something that is not possible in conventional
methods of lab testing or pilots. Specific and generic exemptions in
regulations, valid only for RS testing, are granted for testing of new
ideas. Regulatory bodies in many countries have established such sandbox
frameworks. Providing such a framework for live testing in India will encourage
more entrepreneurs to develop solutions for the digital communication industry
of the country as well as the world.
Subsequently, the Central Government inter-alia made following
provisions in the Telecommunication Act’ 2023 notified on December 24, 2023:
“The Central Government may, for the purposes of encouraging and
facilitating innovation and technological development in telecommunication,
create one or more regulatory sandboxes, in such manner, and for such duration,
as may be prescribed.
Explanation. — For the purposes of this section, the expression
“regulatory sandbox” refers to a live testing environment where new products,
services, processes, and business models which may be deployed, on a limited
set of users, for a specified period of time, with certain relaxations from the
provisions of this Act.”
The DoT has also issued guidelines on 11.03.2024 to establish and
operate ‘Spectrum Regulatory Sandbox’ (SRS) or ‘WiTe Zones (Wireless Test
Zones)’ to promote R&D activities, outdoor testing/experimentation in the
field of emerging new radio communications technologies. However, these
guidelines do not provide for any connectivity with PSTN/Public commercial
network/satellite, for the purpose of testing/Research & Development
(R&D) i.e., testing in WiTe Zones does not allow exposure of products to
live network environments. Beyond offline/laboratory/WiTe Zone testing, there
will be a requirement for testing the products in actual live network
environments. Also, apart from exemptions that are related to spectrum, some
products may require other types of regulatory relaxations for testing in live
network requirements.
Based on the reference received from DoT, stakeholder feedback, and in
line with the definition of Regulatory Sandbox as provided in the
Telecommunication Act’ 2023, which emphasize on testing of new products,
services, processes, and business models in live testing environment on a
limited set of users for a specified period of time after obtaining certain
regulatory relaxations, the Authority has finalized its recommendations.
The recommendations outline all the relevant components in detail and
offer a comprehensive framework for conducting Sandbox testing for the Digital
Communication sector. As part of the recommendations, the Authority has
outlined the objective and boundaries of the RS framework. The
recommended RS framework for Digital Communication sector details the
qualification to take part in the RS testing, essential requirements that
participants must meet, supporting paperwork needed to demonstrate eligibility,
the application, evaluation & approval procedure, the authority to waive or
amend rules, validity period, procedures for authorization revocation, and the
reporting requirements.
Indian companies or partnership firms, limited liability partnerships or
a research institute who have done limited prior testing of their
products/services/applications and meet all conditions mentioned in the
framework can apply for regulatory sandbox testing. As the RS testing
will be carried out in live networks on certain set of users, the framework has
kept the security of networks and protection of customers in mind. Accordingly,
it has been provided in the RS framework that the applicants will have to,
inter-alia, provide details of regulatory exemptions sought, risk mitigation
safeguards proposed, consumer protection mechanism suggested, and a well-defined
exit strategy as part of their application. To ensure accountability on part of
Government agencies involved, strict timelines have been provided for
completing the application evaluation process.
The regulatory framework includes clear documentation requirements and
application, evaluation & approval procedures to ensure transparency
throughout the RS process. Additionally, a detailed reporting mechanism
has been defined to monitor the progress and outcomes of regulatory sandbox
testing effectively. The framework provides that permission granted under the
RS will have a validity period of up to 12 months for testing its product.
However, provisions have been incorporated for extending the validity period or
to early close/terminate the testing, if so required. An overseeing body has
been proposed to monitor and evaluate regulatory sandbox testing so as to keep
it on track and take necessary corrective measures, if required.
The Telecommunication Act’ 2023 has already extended the scope of
Digital Bharat Nidhi to facilitate innovation and experimentation in the
telecom sector by extending suitable financial support. As part of the
regulatory sandbox framework, the authority has recognized that some of the
innovations can have potential to bridge the digital divide and bring
socio-economic advancement to under privileged sections of the society, if
deployed on wider scale. However, despite being very promising, such
innovation may lack adequate funding support and, therefore, the authority has
recommended that such deserving innovations may be considered to get funding
support for testing under RS Framework under Clause 25 (b), (c) and (d) of the
Telecommunication Act’ 2023.
The recommended Regulatory Sandbox framework is expected to give the
Digital Communication industry’s startup ecosystem access to real network
environments and other data of telecom network to help test the reliability of
new applications before bringing them to market. The framework provides for
using cross-sector cooperation in carrying out RS testing with the help of
other ministries and agencies. By providing a RS framework that enable various
digital communication sector entities to work together in a structured manner,
these recommendations are expected to synergize the efforts of innovators,
startups, telecommunications companies, government agencies, and regulators to
boost innovation and start-up eco system.
The recommendations have been placed on TRAI’s website www.trai.gov.in.
For any clarification/information, Sanjeev Kumar Sharma, Advisor (Broadband and
Policy Analysis), TRAI may be contacted at Tel. No. +91-11-23236119.