The Department of Telecommunications (DoT), in March last year, had requested TRAI seeking their advice on rationalizing the Entry Fee and Bank Guarantees associated with various licenses in the telecom industry.

 In its response, TRAI issued the consultation paper for the same wherein all the relevant stakeholders/ industry associations participated and contributed with their comments. An Open House Discussion was convened by the regulator.  

It is hoped that the reductions in entry fees and merging of bank guarantees will lead to the entry of new service providers in the market, increase investment, and enhance competition in the telecom sector.

TRAI has diligently formulated these consolidated recommendations for the DoT’s consideration of entry fees and bank guarantees.

Here are the salient features of the recommendations:

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 fees for the following UL authorizations should be rationalized: 

• Access Service: from Rs. 1 crore to Rs. 50 lakh for each telecom circle/ metro area; from Rs. 0.5 crore to Rs. 25 lakh for J&K and North-East each. 
• NLD and ILD: from Rs 2.5 crore to Rs 50 lakh. 
• PMRTS: from Rs. 50 thousand to Rs. 20 thousand for each telecom circle/ metro area. 
• ISP “B”: from Rs. 2 lakh to Rs. 50 thousand for each telecom circle and Rs. 25 thousand for J&K and North-East each. 
• ISP “A”: from Rs. 30 lakh to Rs. 10 lakh. 

4. The entry fee for UL (VNO) authorizations also should be reduced substantially to promote competition and improved provision of services. 

5. There should be no entry fee at the time of renewal of licenses. 

6. For a Unified License, Financial Bank Guarantee (FBG) and Performance Bank Guarantee (PBG) should be merged into a single Bank Guarantee for securitizing the dues, to cover the violation of license conditions and to ensure the performance under license agreement. 

7. Similarly, for the Mobile Number Portability license, FBG and PBG should be merged into a single Bank Guarantee. 

8. To enhance ease of doing business, the process for submission of electronic bank guarantee (eBG) should be adopted. 

You can access the official notification regarding “Rationalization of Entry Fee and Bank Guarantees” here.

For more information in this regard, please reach out to us at voice-compliance@vincular.in

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