Consolidated licensing, cap on foreign ownership likely

A new-look telecommunications network and licensing policy is in the making with a sweeping reform package aimed at simplifying regulation, reducing inefficiencies and enabling the sector to adapt to modern technological and market realities.

The government on Thursday unveiled the draft Telecommunications Network and Licensing Policy 2025 to replace the outmoded International Long-Distance Telecommunications Services (ILDTS) Policy 2010.

The new framework proposes discontinuing several existing licence categories, including Interconnection Exchange (ICX), International Internet Gateway (IIG), and International Gateway (IGW), and replacing them with a consolidated licensing structure.

The structure aims to simplify regulation, reduce inefficiencies, and help the sector adapt to modern technological and market realities.

The draft has been opened for public consultation, with stakeholders invited to provide feedback before the framework is adopted.

The draft describes the 2010 policy as "outdated and fragmented", noting that its multi-tiered licensing regime has created overlapping regulations, inefficiencies, and a "distorted competitive environment".

The new framework is designed to establish a simplified network topology, foster a business-friendly and innovation-driven licensing system, and enhance affordability and accessibility for consumers.

In place of the existing fragmented system, the draft introduces four major licence categories along with one enlistment category to cover the entire telecommunications ecosystem.

The International Connectivity Service Provider (ICSP) will handle all international voice, internet, and data connectivity, ranging from IP transit and SMS routing to international peering services.

For domestic infrastructure, the National Infrastructure and Connectivity Service Provider (NICSP) will be responsible for building, operating, and sharing transmission facilities, such as optical fibre and telecom towers, with the specific mandate to extend fibre connectivity up to the union level.

Services delivered directly to end-users will come under Access Network Service Provider, divided into Cellular Mobile Service and Fixed Telecom Service licences.

Both licences will allow operators to offer any technically viable value-added service within their scope.

A separate licence for Non-Terrestrial Networks and Service Providers will govern satellite and other platform-based services.

In addition, an enlistment category titled Telecom Enabled Service Provider will cover entities providing functions such as SMS aggregation.

The draft policy sets out a detailed migration path for the existing licence-holders, confirming that several categories will be phased out.

Submarine Cable and International Terrestrial Cable licensees can migrate to the ICSP licence, while Nationwide Telecommunications Transmission Network (NTTN) and tower-sharing companies will be absorbed into the NICSP framework.

Cellular-mobile operators will transition to the new Cellular Mobile Service licences, while Public Switched Telephone Network operators and Internet Service Providers of different tiers will be consolidated under the Fixed Telecom Service licence.

In contrast, licences for National Internet Exchange (NIX), call centres, telecom value-added services, and vehicle-tracking systems will be deregulated altogether.

The final stage of the migration is scheduled to begin no later than June 30, 2027.

The proposed framework also introduces fresh restrictions on foreign ownership.

Cellular Mobile Service Providers will be allowed to have a maximum of 85 per cent foreign equity, while NICSP licensees will be permitted up to 65 per cent if the investment comes as fresh, identifiable foreign direct investment.

ICSPs will face a stricter limit of 49-percent foreign ownership.

New arrangements for traffic exchange form another part of the policy.

ICSP licensees will be required to establish domestic peering for internet traffic among themselves, while Access Network Service Providers must ensure mandatory domestic voice- and data interconnection as well as internet peering. The physical separation of interconnection points, which was previously mandated, will no longer be required, enabling operators to share infrastructure in a bid to cut costs and boost efficiency.

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