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Scope and categories
The Captive Services Rules create a framework for private, non-commercial telecom networks and recognise 4 (four) sub-categories: (a) Captive Mobile Radio Trunking Service ("CMRTS"); (b) Captive Non-Public Network ("CNPN"); (c) Captive Very Small Aperture Terminal ("VSAT"); and (d) captive general service. The authorisations granted for a period of 20 (twenty) years, are renewable and non-exclusive.
Eligibility, migration and holding restrictions
Under the Captive Services Rules, authorisations are available to companies incorporated in India and government entities, subject to FDI norms and exclusion of prohibited investors. An entity cannot hold more than one authorisation for the same service in the same area. Upon restructuring or acquisition, the existing authorisations are deemed subsumed and cancelled, but all liabilities continue. The existing licensees must apply to migrate to the corresponding authorisation and include proof of migration. Any processing/entry fees, previously paid, may be adjusted against the new authorisation fees.
Application, guarantees and fees
Under the Captive Services Rules, applications are portal-based with processing fees and Guarantees. CNPN and Captive General Services authorisations are granted without a letter of intent and are exempt from authorisation fees.
CMRTS and VSAT attract annual fees and Guarantees as follows:
- CMRTS has a fee of INR 300 (Indian Rupees three hundred) per user terminal (minimum aggregate of INR 5,000 (Indian Rupees five thousand) initially, rising to INR 25,000 (Indian Rupees twenty-five thousand) from year 4 (four)) and INR 20,000 (Indian Rupees twenty thousand) Guarantee; and
- VSAT has a fee of INR 10,000 (Indian Rupees ten thousand) per terminal per year, INR 7,50,000 (Indian Rupees seven lakh fifty thousand) entry fee and INR 3,00,000 (Indian Rupees three lakh) Guarantee.
Only 1 (one) Guarantee is required per authorisation. The payment schedules, interest on delayed payments, and audit/compliance requirements apply. Dues are recoverable as arrears of land revenue, and Guarantees may be encashed for non-compliance.
Technical, operational and security conditions
Under the Captive Services Rules, operators must ensure strict network isolation from public networks (no commercial/public use), comply with right of way and technical standards, and localise data to protect network integrity. Security obligations include lawful interception and monitoring facilities, procurement from trusted sources/products, and restrictions on remote access (foreign remote access only with prior approval). Transmission of unlawful or infringing content is prohibited and national security directives must be followed.
Category-specific conditions
Under the Captive Services Rules, there are category-specific conditions such as:
- CMRTS: It is permitted for captive use only with rollout obligation (12 (twelve) months). There must be no interconnection with other networks and is subject to terminal-based fees.
- CNPN: It is confined to premises and no authorisation fee is payable. The spectrum may be leased or assigned. There are strict isolation requirements for CNPN authorisations to ensure that such networks remain private and secure.
- VSAT: For this authorisation, the entity must have satellite clearance. VSAT has a per-terminal annual fee, entry fee and Guarantee. It will also ensure the traffic/data is routing only through satellite earth station gateways and associated telecommunication networks located within India.
- Captive general service: The conditions allow the establishment of wireline or wireless networks strictly for captive use, with no authorisation fee applicable and a mandatory strict isolation from public telecommunication networks.
Enforcement and remedies
The Captive Services Rules set out renewal, surrender, revocation and expiry actions. Further, a single Guarantee per authorisation may be encashed for breaches, and dues are recoverable as land-revenue arrears.
Conclusion
The Draft Authorisation Rules mark a significant step in modernising India's telecom regulatory and statutory framework designed to simplify and reduce compliance requirements for operators. It also takes in account the existing licences issued under the Indian Telegraph Act, 1885, while introducing a unified authorisation regime aligning with the Telecom Act. While tailored to main, captive, and miscellaneous services, they maintain a consistent structure, including portal based authorisation, clear eligibility criteria, financial and technical obligations, and stringent security norms. Adoption of this new authorisation regime is optional offering the existing licensee the choice to remain under the old licensing regime or opt for the new authorisation based structure as per the Draft Authorisation Rules. The framework is designed to be attractive for voluntary transition.
Once finalised, the Draft Authorisation Rules are expected to create a more predictable, transparent, and innovation-friendly environment for the telecom sector, while addressing critical policy concerns around competition, user safety, and national security. However, since migration is not mandatory, both systems may operate simultaneously, potentially leading to confusion and leaving the door open for overlaps and regulatory uncertainty as the old and new systems coexist.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
