The second coming of the Telecom Regulatory Authority - Views on News from Equitymaster

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  • Mar 16, 2000 - The second coming of the Telecom Regulatory Authority

The second coming of the Telecom Regulatory Authority

Mar 16, 2000

The Parliament has approved the setting up of the Telecom Regulatory Authority of India (Trai) in its new form –regulator and tribunal. The move is aimed at separating the regulatory and appellate functions of the authority. The Trai’s first stint had mixed success. While the regulator was successful in the implementation of the revenue sharing regime, it failed in its attempts to set interconnect charges between fixed line and cellular networks. This failure jeopardised the implementation of the calling party pays regime in case of cellular telephony. Currently, both the caller and the receiver (in cellular telephony) have to pay up.

The Trai also needs to be credited with the implementation of the plan to slash domestic and international long distance telephony charges and cellular usage and rental charges. The cellular industry is said to have witnessed a surge in subscription post the decline in usage rates. The achievements of Trai have greatly benefited the telecom sector and the users of telecom services.

The main reasons for the dissolution of the Trai were the Department of Telecommunications (DoT) and the Mahanagar telephone Nigam Limited (MTNL). Both these public sector units raised issues pertaining to the powers and rights of Trai to set interconnection charges. Coupled with this, MTNL’s foray into cellular services, on ad hoc terms and using technology that was not compatible with existing technology, also aggravated this issue.

The government on its part seems to have done well by quickly replacing the Trai with a new body. In all likelihood, the new regulator will tackle the issue of the calling party pays regime as top priority. This is one hurdle that continues to stymie the growth of the domestic cellular sector.

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