Codified Continuity: The Missed Opportunity in India’s New Telecom Rules

The Telecommunications Act, 2023 replaced the 138-year-old Telegraph Act 1885 and was presented as a turning point. It was meant to bring clarity and flexibility, encourage growth, and streamline obligations for industry. The draft rules for “main telecommunication services,” released recently, are the first test of that promise. They bring order to scattered obligations but do not change the foundation. Instead, they carry the old burdens of the Unified Licence into statutory form.

Codification has value. It reduces disputes and puts obligations on firmer legal ground. But it also locks into law requirements written for a different era. For operators, the compliance load remains just as heavy, even as the sector prepares for new technologies and business models.

Adjusted Gross Revenue, or AGR, is a good example. This is the share of an operator’s earnings paid to the government. The draft rules now spell out what can be excluded—dividends, interest, foreign exchange gains, rent, and insurance receipts. They also separate “Applicable Gross Revenue” from AGR after deductions. This clarity may reduce litigation. Yet the revenue-share model is unchanged, and the rules even add a “presumptive AGR” floor tied to spectrum fees. Easier to read, but no easier to bear. Operators have long asked for relief here, and the rules leave them disappointed.

The same story plays out in provisions on data localisation and record-keeping. Rule 48 requires user and accounting data to remain in India, with limited exceptions. Rule 49 mandates that call records and IP logs be stored for at least two years, and operational logs for longer. Operators must report software and equipment changes within 15 days. These conditions have been enforced through circulars for years. Now they are written into law, making them harder to revisit even though many in the sector question whether such sweeping obligations still make sense.

These are only a few examples, but they reflect the broader pattern: longstanding obligations have been carried forward, streamlined, and given statutory force. The result is order without reform.

This compliance-heavy framework also explains why operators keep pressing for “same service, same rules” with internet-based platforms. Licensed providers pay AGR fees, build interception systems, localise data, and undergo audits. Messaging applications do not. The imbalance is real, but the better question is whether AGR, localisation, and record-keeping are all still required in their current form, or whether some can be trimmed. That is the debate the draft rules avoid.

The Act framed flexibility as a way to adapt to fast-changing technology. In practice, though, this flexibility sits with the government, which can alter obligations through executive orders. Under the licence system, terms were contractual, and sudden changes could be contested. The shift to a purely rule-based model removes that buffer. While government always had wide powers, the lack of built-in checks such as prior consultation means regulatory conditions can now shift more easily, adding to uncertainty.

Other jurisdictions show how things could be different. In Brazil, ANATEL’s 2025 Resolution 776 consolidated outdated rules into a single framework and introduced regulatory sandboxes. These sandboxes allow experimental services to operate with regulated, project-specific exemptions from certain regulatory provisions, granted at ANATEL’s discretion and subject to monitoring and conditions defined by the Board of Directors. This flexible approach enables controlled experimentation and innovation within limited pilot phases. South Africa’s Electronic Communications Act 2005 provides for a streamlined licence option known as a “class licence” designed for smaller service providers. This licence is granted through a registration process set out in the law, aiming to simplify access by reducing complexity and wait times. The Act establishes the framework for these licences, while details such as fees and specific conditions are determined through regulations and licensing practices. Both models show how tailoring obligations to the scale and impact of the service can open space for innovation and competition.

Even TRAI urged the government to go further. It called for simpler authorisations that cut down costs for smaller providers and for ending outdated circle-based requirements. The draft rules, however, hold on to both. By doing so, they sidestep reforms suggested by the regulator itself.

We now face a clear question. If the intention of these rules was simply to codify and consolidate, they succeed. The framework is clearer, obligations are on firm legal ground, and disputes may reduce. But if the intention was to use the Act and its rules as an opportunity for reform, then that chance has been missed.

India could still seize the moment. It could introduce regulatory sandboxes to test new business models with lighter obligations. It could create a clear “class licence” to free smaller operators from heavy fees and compliance. It could require consultation and impact assessment before new obligations are imposed. These measures would reduce friction, encourage competition, and help the framework keep pace with technology.

The Telecommunications Act, 2023 was a rare chance to design a system fit for the future. Industry had called for simpler authorisations and relief from redundant burdens. Neither has been delivered. What remains is a framework that looks modern on paper but continues to run on the habits of the past — a missed opportunity at a moment when the sector most needs flexibility and vision.

Sumeysh is an Associate Director, Public Policy at TQH (The Quantum Hub