TRAI Consultation Paper on Encouraging Innovative Technologies, Services, Use Cases, and Business Models through Regulatory Sandbox in Digital Communication Sector


Telecom Regulatory Authority of India has issued a Consultation Paper on Encouraging Innovative Technologies, Services, Use Cases, and Business Models through Regulatory Sandbox in Digital Communication Sector.

A regulatory sandbox refers to a controlled and licensed environment where new products, services, or applications can be tested under relaxed regulatory conditions. It provides innovators and service providers an opportunity to experiment, collect evidence on benefits and risks, and refine their offerings. Through the sandbox, regulators engage with the ecosystem, developing frameworks that encourage innovation and responsiveness to emerging technologies. The sandbox approach enables dynamic, evidence-based regulatory environments that evolve alongside technological advancements.

Objectives and Scope

The sandbox framework for the Digital Communication (DC) sector in India aims to promote innovation, protect consumer interests, and mitigate risks associated with new technology and business models. Its objectives include encouraging innovation, reducing regulatory burdens for small and medium-sized enterprises (SMEs), and ensuring consumer protection. Under this framework, entities are granted facilities and flexibility to experiment with telecom products, services, or applications on a limited set of real customers in a live environment for a specific timeframe. The sandbox scope encompasses testing any new DC service or technology that requires a controlled environment.

Eligibility and Essential Conditions

To be eligible for sandbox testing, the principal applicant must be an Indian company incorporated and registered in India. They should possess the necessary financial and technological capabilities, including a minimum net worth of Rs. 25 lakhs as per the latest audited balance sheet. The innovation should add significant value to the market, and there should be a genuine need for live testing on real customers. Applicants must demonstrate compliance with relevant regulations and seek necessary exemptions if required. Testing should have been carried out to some extent before applying for the sandbox, and the product/service/application should offer identifiable benefits to customers. Adequate risk management strategies and safeguards are essential to mitigate potential risks.

Supporting Documents and Evaluation Criteria

Applicants must submit supporting documents, including incorporation certificates, balance sheets, and details highlighting the innovation and benefits of the product/service/application. They must outline prior testing efforts, risk management strategies, and testing plans with defined parameters and milestones. The evaluation criteria encompass a comprehensive assessment of the application, profile of the applicant, financial and technological capabilities, benefits to customers and society, offline testing results, exit and transition strategies, grievance redressal mechanisms, disclosure of risks, and consent processes. Additional factors deemed relevant by the regulatory authority may also be considered during the evaluation process.

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