Tech startups will soon have the opportunity to test their services and products on a telecom network without the need for a bilateral deal with a specific operator. The Telecom Regulatory Authority of India (TRAI) has proposed a framework for establishing a Regulatory Sandbox (RS) for digital services, allowing startups with promising products and services to conduct trials with direct permission from the Department of Telecommunications (DoT).
TRAI expects that most RS applicants will collaborate with telecom service providers for testing. However, it acknowledges situations where startups with significant innovations may struggle to partner with an operator. In such cases, TRAI encourages these entities to approach DoT directly to establish Regulatory Sandboxes. If DoT recognizes an innovation’s widespread impact, it can intervene and mandate telecom service providers to provide testing facilities for deserving innovations.
However, this approach may lead to a large number of entities approaching DoT directly. To address this concern, applicants must provide sufficient justifications for seeking direct approval and demonstrate their efforts to establish partnerships with telcos. Some telecom operators expressed concerns during the consultation process, suggesting that licensed service providers should not be mandated to partner with any entity for RS testing. They proposed that entities seeking participation in RS should be required to enter into agreements with telecom operators before applying jointly for RS.
On the other hand, stakeholders representing consumers argued that RS should not be limited to telecom operators. They advocated for providing opportunities to a range of entities beyond telecom service providers to participate independently in RS. Another stakeholder cautioned against imposing additional obligations on applicants to justify direct application for RS testing, suggesting that such requirements might hinder the growth of newer or unlicensed businesses.
