TRAI

PGP -1 , 2008-2009
Course Name : Legal Aspects of Business
Course Instructors : Prof. Lalitha Sreenath &
Prof. M.R. Sreenath

By:
Arijit Das
Roll No : 06, Section –D
PGP -1, 2008-2010
Date of submission :
9 July,2008
th
History of Telecommunicatons in
India
 Telecommunications were first introduced in India
near Calcutta in 1851, by the then British
Government.
 5 years after Graham Bell invented Telephone, British
Govt. introduced telephone services in India.
 After independence, till the 1980s, during the state
led planned economic policies the government
controlled all aspects of telecommunications through
the Department of Posts & Telegraph leading to a
monopoly in the sector.
Things started changing
 Birth of DoT :

 Rajiv Gandhi initiated the liberalization of the telecom

sector by de-monopolising the telecom equipment-
manufacturing sector in 1985.
 DoT licensed switching technology from various
foreign firms.
 DoT created MTNL & BSNL primarily to have access
to private funds.
 DoT tentatively started liberalizing, by opening the
cellular services in July 1992.

However:
• The conditions imposed were onerous.
 The selection criteria were not announced before
the bds were made.
 All this resulted in lengthy litigations.
National Telecom Policy
1994
 The national telecom policy, which was in the works
since 1990 was finally announced in May 1994.
 Allowed entry of private players along with PSUs.
 Ushered in competition and hence furthered the
liberalization process.
 Many foreign telecommunications companies
participated in the bidding for the right to offer basic
(wire line) telephony in India. The main attraction was
the then widely used number of 250 million “middle
class” potential customers, and the waiting list of
more than 3 million.

However:
 Disillusioned by the government’s terrible handling
of the telecom services deregulation, several
international telecom giants had by 1999, pulled out
of India.
Birth of TRAI
 InJanuary 1996, a Presidential ordinance
was passed to create TRAI.
 TRAI was finally created by the passing of
the Telecom Regulatory Authority India
(TRAI) Act in February 1997.
Mission & Objectives of
TRAI
 To ensure that the interests of consumers are
protected and
 To nurture conditions for growth of
telecommunications, broadcasting, and cable services
in India .

Objectives of TRAI :
• To provide a fair and transparent policy
environment which promotes a level playing field and
facilitates fair competition.  
• In pursuance of above objective TRAI has issued
from time to time a large number of regulations,
orders and directives to deal with issues coming
before it.
Constituent members
 The TRAI Act of 1997 specifies that the Authority shall
consist of a Chairperson and not more than two
whole-time Members and not more than two part-
time Members.
The present members are :
Sh. Nripendra Misra Chairperson
Sh. A. K. Sawhney Member
Sh. R. N. Prabhakar Member
Prof. N. Balakrishnan Part-time Member
Dr. Rajiv Kumar Part-time Member
Restricted Powers of TRAI
 There were various discrepancies between the TRAI Act 1997 and the
Indian Telegraph Act of 1885, creating jurisdictional conflicts between
DoT and TRAI.

 The TRAI Act excluded issues covered by the Monopolies and

Restrictive Trade Practices Commission (MRTPC) from its jurisdiction
implying that the anti-competitive behaviour by the DoT cannot be
referred to TRAI .

• While the TRAI Act gives the regulatory powers to resolve disputes
between service providers, TRAI was not given jurisdiction over DoT,
the largest telecom service operator in the country.

 Although the cabinet of ministers later extended TRAI’s powers over

DoT, the jurisdiction
granted was ambiguous because the regulator only had powers over
DoT as an operator and not as a policy maker.

 The courts ruled in DoT’s favour when TRAI tried to block MTNL’s
decision to nter cellular services with the blessing of its owner DoT in
Customer friendly
measures

 The TRAI has since its inception has taken

various measures to see to it that the
consumer interests are protected.
 It has done this through Tariffs orders,
Directions and regulations.
Tariff Orders
 13th Amendment, dated 01.05.2001
 The charges for lost/damaged SIM card should not exceed the
cost to the service provider plus a mark-up.
 There should be at least one pre-paid SIM card of less than
Rs 300 and sufficient validity period.
 The unused amount will be carried forward , if the subscriber
renews subscription within the “ grace period”.
• 30th Amendment, dated 16.01.2004
 All services which do not affect “talk time value” including
incoming voice calls / SMS shall continue to be available to the
Pre-paid subscribers during the entire validity period even after
the talk time value is exhausted.
• 31st Amendment, dated 07.07.2004
A tariff plan once made available to the tariff plans, shall
be available to the subscriber for a minimum period of six
months.
The customer also has the choice to move to other tariff
plans.
Some more…….
 43 rd Amendment , dated 21.03.2006
 It aimed bringing transparency in the billing and metering
processes of various telecom providers.
 It aimed at improving the quality of services to the
consumers.

44th Amendment, dated 24.01.2007

 It aimed at reducing and thereby regulating the tariffs for
roaming services.
Directions
 Direction No.411-5/98-FN dated 08.01.2001
 “ Not deny Registration for provision of telephone connections to a
prospective subscriber on any account until directed by the licensor in
writing to so refuse”
 “Keep the Waiting List of prospective subscribers shall be provided
strictly as per the priority in this Waiting List. This Waiting List should be
accessible to all the Wait Listed applicants.”

• Direction No.303-11/2003-TRAI (Eco) dated 16.01.2004

 If there is an amount at the end of the validity period it will be
carried over to the renewed card, if such renewal is done in a specified
reasonable period.
 The service providers are bound to provide information to their
consumers regarding
III. Validity period,
IV. Grace period
V. The fact that unused balance can be carried forward to the grace
period

• Direction No.101-3/2003-MN (Pt.II) dated 03.03.2004

 The subscriber cannot be offered voice mail services without
his/her consent and cannot be charged for it.
Some more ……
 Direction No.301-27/2005-Eco dated 27.06.2005
 When the usage of the subscriber reaches the credit limit set for him/her,
a notice should be given to the subscriber and a time limit given for
making payment.
 The credit limit set for a postpaid subscriber should be intimidated to
him/her.

• Direction No.303-1/2004-Eco dated 08.07.2005

 “the security deposit after adjustment of dues, if any, is required to be
refunded to subscribers within a time frame of 60 (sixty) days. The service
provider has also to pay an interest for any delay in making refund within
the stipulated period.”

 Direction No.305-8/2004-QoS dated 26.09.2005
 it has been provided that the complete details of the tariff plans as well
as the financial implications for various usage slabs should be included in
the tariff brochures available at retail outlets.

 Direction No.301-49/2005-Eco dated 16.09.2005

 There are many rental plans such as “ Zero Rental” which gives the
subscribers the false impression, such tariff plans should be done away with.
3G Services
 Presently TRAI is embroiled in a tussle with Dot with
spectrum allocation for 3G services.

 While the DoT is in favour of direct entry of foreign

players in it, to boost competition and ensure better
services, however TRAI wants only existing players
and prefers a FDI route for foreign players.

 The telecom industry is divided on the TRAI’s

recommendations on 3G services.
 GSM players feel that the high entry-fee of more than Rs. 1000 Crore
is a disincentive for them, specially for rural market penetration and is
unfair.
 The CDMA players feel that the recommendations are fair to all and is
happy with it.
 Thank
You