TRAI Recommends Merging Bank Guarantees & Slashing Telecom License Fees

The Telecom Regulatory Authority of India (TRAI) has put forth a comprehensive set of recommendations aimed at revitalising the telecommunications sector. These proposals include advocating for a significant reduction in entry fees for various telecom service licenses and the consolidation of bank guarantees. The primary objective is to facilitate the entry of new players into the telecom market while simplifying operations for existing operators.

One key recommendation from TRAI is to halve the entry fee for Unified Licences (UL) for access services, making it more affordable and encouraging new entrants. Specifically, they suggest reducing the entry fee for access services from Rs 1 crore to Rs 50 lakh for each telecom circle or metro area. In regions like Jammu & Kashmir and the North East, TRAI recommends reducing the fee from Rs 0.5 crore to Rs 25 lakh each.

For National and International Long Distance services, TRAI proposes a reduction in entry fees from Rs 2.5 crore to Rs 50 lakh. Additionally, for the Public Mobile Radio Trunking Service (PMRTS), they suggest a reduction from Rs 50,000 to Rs 20,000 for each telecom circle or metro area. In the case of internet service providers in the national area, TRAI recommends reducing the entry fee from Rs 30 lakh to Rs 10 lakh. For ISP category B, they propose a reduction from Rs 2 lakh to Rs 50,000 for each telecom circle and Rs 25,000 for Jammu and Kashmir and the North-East.

Furthermore, TRAI advocates merging Financial Bank Guarantee (FBG) and Performance Bank Guarantee (PBG) into a single Bank Guarantee for Unified Licences. This consolidation is expected to simplify compliance for operators and promote ease of doing business. TRAI also recommends the submission of electronic bank guarantees to further streamline processes. TRAI has also suggested that no entry fee should be charged during license renewals. 

Overall, these proposed reductions in entry fees are designed to attract new service providers to the market, fostering healthy competition and increased investments in the telecom sector. The merger of bank guarantees aims to promote ease of doing business and encourage licensees to invest in the sector, ultimately driving sectoral growth. 

These measures, if implemented, are expected to improve service quality and benefit consumers. Bank Guarantees are financial instruments that safeguard the government's interests by ensuring that licensees fulfill their financial obligations and comply with the terms and conditions of their licenses.