The Telecom Bill 2022 aims to eliminate doubts: Ind-Ra

Mumbai-based ratings and research organisation said on Monday that the proposed Telecommunication Bill 2022 will clarify some of the crucial features of the telecom sector, including regulation for over-the-top (OTT) providers, but noted that it would not speed up insolvency-related processes thereby aiming to eliminate all uncertainties and doubts.

India Ratings (Ind-Ra) stated in a statement that the bill aims to address uncertainties about the control of bandwidth for the corporates under insolvency/stress as well as the governing body for over-the-top (OTT) and internet service providers.

The rating agency also stated that the proposed Indian Telecommunication Bill, 2022 aims to provide comprehensive clarification on several important issues that have impacted the telecom sector over the past two years.

The Department of Telecommunications (DoT) unveiled a proposal for a new telecom bill on Wednesday with the goal of streamlining the regulatory framework and facilitating a quicker rollout of cellular infrastructure across the nation.

Additionally, the Center focuses on several important topics like spectrum management and over-the-top (OTT) apps by putting them inside the purview of the law with loose regulation.

The agency worries that the bill could not hasten the procedure of resolving bankrupt telecom service providers.

The bill specifies that spectrum rights stay with the government, which suggests that creditors cannot sell spectrum for its market value under the Insolvency and Bankruptcy Code.

According to Ind-Ra, the government reserves the authority to take back the spectrum if the struggling telco fails to pay the government due amount, further raising questions about the telcos’ economic viability.

The National Company Law Appellate Tribunal declared in a July 2021 that a troubled telco cannot be put to insolvency procedures until all government obligations have been paid.

Given that the struggling telcos could not have the finances to pay off government debt and/or have the operational cash flows, the bill’s impact on the resolution process needs to be evaluated.