Reorient telecom licensing approach

What we need to ask is not how to license more, but why license at all in certain cases. We must assess if the cost of compliance outweighs the societal benefit.

Written by Guest

September 11, 2025 01:00 IST

telecom, broadcasting, satellite, cloud, content, fintech

A 21st-century framework must start from the principle that licensing is the exception, not the default.

By TV Ramachandran

In what may seem a self-contradictory position, in this digital era, telecom has been “liberated” from the telecom market and is woven into the fabric of almost all socio-economic activity. It has become the magical wand that opens doors to completely different sectors such as retail, finance, banking, healthcare, education, and transportation. Data flows defy geography to deliver enormous socio-economic benefits across borders. Yet, even in this hyperconnected world, notwithstanding admirable achievements on many fronts and a historic Telecommunications Act 2023 with many parts being implemented, India’s licensing policy framework remains somewhat archaic, with sectoral silos and physical boundaries. Telecom licences and authorisation take ages, compliance checklists stretch endlessly, and penalties are calibrated for the monopoly era—not for the layered, border-blurred, and ultra-agile digital ecosystem we now inhabit.

Licensing Burdens and Lost Opportunities

Yet, as more services overlap—telecom, broadcasting, satellite, cloud, content, and fintech, all enmeshing with each other—the policy instinct has been to extend control rather than recalibrate it. The question we therefore urgently need to ask now is not how to license more, but why license at all in certain cases. And where licensing is justified, we must assess whether the cost of compliance outweighs the societal benefit.

Temptation for “command and control”: Albeit much softened in recent years, India’s telecom licensing regime remains one of the most onerous in the world. A unified licence can run into dozens of annexures and demands compliance across security, financial, technical, and operational parameters. Even activities that in most countries are registration-based or unlicensed—such as providing Wi-Fi hotspots, deploying private networks, or satellite-based Internet of Things (IoT)—often fall under the heavy licensing hatchet here.

The burden is not just administrative. The opportunity cost is immense. Every extra step of approval delays service roll-out; every grey area in the rules chills investment; every layer of compliance devours scarce capital that could otherwise expand networks or improve quality of service. For instance in Wi-Fi, globally delicensed spectrum has powered innovation worth billions of dollars. India’s delay in releasing the 6 GHz band for Wi-Fi 6E/7—partly due to incumbent lobbying—has cost faster, cheaper broadband and significant economic gains. There are similar roadblocks in satellite broadband, private 5G, and cloud data centres.

Embedding Cost/Benefit Into Regulation

The missing RIA lens: Globally, policymakers and regulators increasingly apply regulatory impact assessments (RIAs) to weigh total costs—compliance, opportunity loss, innovation suppression—against intended benefits. Australia adopted RIA in as early as 1985, making it one of the first nations to institutionalise this approach.

India’s digital communication policy processes rarely apply such a lens. Once a licensing or registration requirement is proposed, there is a flawed/misplaced “justification” in terms of “security” or “level playing field” without quantifying its economic drag. There is little transparency on whether alternative, less intrusive options were considered—such as self-certification, ex-post enforcement, or co-regulation.

For instance, when private 5G networks are kept in a regulatory holding pattern, the cost is not merely to a few companies. It is the lost productivity gains across manufacturing, logistics, healthcare, and agriculture that could have used ultra-reliable, low-latency connectivity. When satellite broadband operators face a labyrinth of overlapping permissions from several departments, the cost is not just their legal bill—it is the millions of unserved rural citizens who stay offline.

A 21st-century framework must start from the principle that licensing is the exception, not the default. When justified—for managing scarce spectrum, ensuring interconnection, or protecting national security—it should be narrow, technology-neutral, and proportionate to risk.

Crucially, cost/benefit analysis should be embedded into every new licensing or regulatory proposal. Before imposing any permission regime, ministries and regulators should publicly explain: the specific problem it addresses; whether less intrusive solutions were considered and their outcomes; compliance costs for both government and industry; and, most importantly, the net cost/benefit for consumers and the public.

Such transparency would not only curb overreach, but also build trust between the government and industry, and signal global investors that India is serious about business.