SDG 16: Peace, Justice and Strong Institutions
Institutions: Telecom Regulatory Authority of India (TRAI) | Ministry of Communications,
The Telecom Regulatory Authority of India (TRAI) has released proposed changes to how it issues financial penalties (fines) to telecom companies that break rules. These changes are part of two new draft rules: the Telecommunication Tariff (Seventy Second Amendment) Order, 2025 and the Reporting System on Accounting Separation (Amendment) Regulations, 2025.
The goal of these proposals is to make the penalty system clearer and more effective when companies fail to follow the 1999 Tariff Order and the 2016 Accounting Separation Regulations. The changes would allow fines to be set in a graded manner, meaning the penalty would match the seriousness of the violation. TRAI also plans to set an upper limit (ceiling) on the total amount a company can be fined and charge interest if penalties are paid late. Companies and the public can submit feedback on these proposed rules until October 31, 2025.
This move signals a shift towards a more stringent and structured regulatory compliance framework in the telecom sector, ensuring that penalties for non-adherence are proportionate, enforceable, and ultimately lead to better governance and transparency of reporting systems.
What does ‘Accounting Separation’ mean? → Accounting Separation is a rule that requires large telecom companies to keep their financial records separate for each of the different services they offer. This helps regulators ensure that a company isn’t unfairly using profits from one service (where it might have a monopoly) to illegally fund another service, keeping competition fair and prices transparent for all customers.
What is the Telecommunication Tariff Order, 1999 (TTO, 1999)? → The TTO, 1999, is the main set of rules TRAI uses to control the prices and conditions for all telecom services—like how much you pay for calls, rental plans, and deposits. It gives TRAI the power to review prices, set maximum limits (ceilings) and minimum limits (floors) on what companies can charge for certain services, and makes sure every customer is offered a basic, standardized plan. Essentially, it’s the rulebook ensuring that telecom pricing is fair and clear for consumers.
What are the Reporting System on Accounting Separation Regulations, 2016? → These rules require large telecom companies to keep separate, detailed financial reports for each distinct service they provide (e.g., mobile service, long-distance service, internet service). The purpose is to give TRAI a clear view of where a company makes and spends its money in each business segment. This transparency allows the regulator to check for and prevent cross-subsidization, which is the unfair practice of using high profits from one service to illegally undercut the prices of a competitive service. The 2016 Regulations ensure consistent, accurate financial reporting across the industry.
Follow the full update here: http://www.trai.gov.in/sites/default/files/2025-10/PR_No.110of2025.pdf