Delayed tariff reporting may cost telcos up to Rs 5 lakh

The Telecom Regulatory Authority of India (TRAI) has released a draft amendment proposing significantly stricter penalties for telecom operators and internet service providers (ISPs) who fail to report new tariff plans or changes to existing ones within the stipulated timeframe. The move is aimed at reinforcing transparency, promoting fair competition, and safeguarding consumer interests.

Under current regulations, service providers are required to inform TRAI of any new or revised tariff plans within seven working days of their implementation, in accordance with the Telecommunication Tariff (52nd Amendment) Order, dated 19 September 2012. This stipulation, commonly referred to as the "reporting requirement," enables TRAI to scrutinise tariff changes and intervene if the modifications are deemed predatory, anti-competitive, or otherwise detrimental to consumer welfare.

Existing penalty framework

As it stands, the penalty for non-compliance with the reporting requirement is Rs 5,000 per day of delay, capped at a maximum of Rs 2 lakh. However, TRAI has observed recurring instances of non-compliance, suggesting that the current penalty system lacks the deterrent effect needed to ensure timely reporting.

Proposed amendments and new penalty structure

In a draft amendment to the Telecommunication Tariff Order, 2025, TRAI has proposed a more stringent, graded penalty structure. Under the revised framework:

• A fine of Rs 10,000 per day will be imposed for delays during the first seven days.

• From the eighth day onwards, the penalty will increase to Rs 20,000 per day.

• The total financial disincentive will be subject to a maximum cap of Rs 5 lakh.

• The nature and gravity of each violation will influence the level of penalty applied.

TRAI stated that these changes are being introduced to encourage greater compliance with regulatory obligations while promoting transparency and accountability within the telecom sector.

Interest on delayed payments

To further ensure timely compliance, TRAI also proposes to levy interest on overdue penalty payments. If a service provider fails to pay the imposed penalty on time, they will be required to pay interest at a rate 2% above the one-year marginal cost of lending rate (MCLR) set by the State Bank of India (SBI) at the beginning of the financial year in which the penalty becomes due. TRAI believes this measure will discourage deliberate delays in payment and strengthen enforcement mechanisms.

While the proposed amendments aim to impose stricter sanctions, TRAI has also indicated a degree of flexibility. The regulator will retain the discretion to waive or reduce the penalty if it is satisfied with the justification provided by the service provider. However, in the event of delayed payment, the interest clause will still apply regardless of the final penalty amount.

Rationale behind the amendments

According to TRAI, the revised penalty structure has been introduced in response to repeated instances where operators failed to adhere to the reporting timeline. Such delays not only undermine regulatory oversight but also prevent consumers from accessing timely and accurate information about available tariff options. The proposed framework is intended to establish a system of proportionate penalties that reflects the seriousness of the violation and encourages proactive compliance.

TRAI has invited feedback on the draft amendments from stakeholders, who have until 31 October 2025 to submit their comments and suggestions. The final version of the amended order will be formulated after taking these inputs into consideration.