TRAI releases recommendations on “Rationalization of Entry Fee and Bank Guarantees”


Telecom Regulatory Authority of India (TRAI) has today issued the recommendations on “Rationalization of Entry Fee and Bank Guarantees”. 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.

The salient features of the recommendations are as follows: –

  1. The entry fee should be reduced from the present levels for Unified License (UL) as well as Unified License (Virtual Network Operator) (UL (VNO)) licenses.
  2. No entry fee for M2M (“A”/ “B”/ “C”), Audio conferencing/ Audiotex/ Voice mail service, ISP “C” recommended.
  3. Entry fee for UL authorizations should be rationalized.

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