The Ministry of Communications has asked the Telecom Regulatory Authority of India (TRAI) for clarification on whether telecom operators' bank guarantees (BGs) can be used to recover fines for their failure to curb spam.
This inquiry follows the TRAI's unprecedented recommendation to encash BGs for penalties totaling INR 141 crore, which remain unpaid. An official stated that since this is the first time such a situation has arisen, consequently, the next steps will need to be carefully considered.
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A source explained that there is no specific license clause for penalties related to unsolicited commercial communications (UCC). While the TRAI has implemented the Telecom Commercial Communications Customer Preference Regulations (TCCCPR) to address spam, the current licensing framework does not allow the Department of Telecommunications (DoT) to penalize telecom operators.
Existing quality-of-service (QoS) regulations are more focused on network performance than consumer behavior, leaving no clear provision for enforcing penalties related to spam. Any attempt to encash BGs could face legal challenges from telecom companies, as BGs are typically reserved for unpaid statutory dues.
Another official noted that spam involves various stakeholders, not just telecom operators. If the DoT moves to encash BGs for failing to combat spam, telecom companies are expected to challenge it legally, as it is not supported by current regulations.
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Although the TRAI has imposed penalties on telecom operators for spam, it believes operators should recover fines from telemarketers. However, this has proven difficult due to telemarketers frequently changing operators, limiting telecom companies' control. Experts caution that using BGs to cover these fines could damage telecom firms' credit profiles.
In response to this regulatory gap, the TRAI plans to issue a consultation paper to bring telemarketers under its regulatory framework, ensuring shared spam accountability across the industry. Currently, telemarketers operate without oversight, contributing to wide-spread spam and financial fraud.
The Ministry of Communications will determine its next steps based on the TRAI's response.
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