Govt. notifies rules enabling live testing environment of new products on a limited set of test users

On 27-11-2024, the Ministry of Communications notified the Telecommunications (Regulatory Sandbox) Rules, 2024 to encourage, facilitate innovation and technological development in telecommunication. The provisions came into force on 28-11-2024.

Key Points:

1. These rules aim to enable a live testing environment where new products, services, processes and business models can be developed on a limited set of test users.

2. Creation of Regulatory Sandbox:

   • Regulatory sandbox can be created and specified on the portal by the Central Government (‘CG’);

   • It can be created upon receiving a proposal from an applicant or on a proposal received in response to a request for proposals from CG;

3. In case any applicant has undertaken any testing, including laboratory environments, it has to include the reports and results of such testing along with the proposal submitted.

4. Any regulatory sandbox will have to specify:

   • Its scope and objectives;

   • Name and detail of approved applicants responsible for operation and management;

   • Eligibility criteria for participation;

   • Telecommunication services/ network/ equipment/ process/ technologies/ business models that can be tested in that regulatory sandbox;

   • Risk analysis and management required to ensure mitigation of any potential risks;

   • Validity period which cannot exceed 24 months, and which can be further extended for another 12 months;

   • Details of exit strategy.

5. Governance Committee will monitor and evaluate the performance of a regulatory sandbox.

6. Every applicant will have to submit a comprehensive report to the Governance Committee, within 15 days of completion of testing/ 30 days prior to the expiry of the validity. The report should contain results of outcome; feedback from the test users; challenges faced, and measures taken to overcome security issues/consumer protection and risk mitigation measure deployed.

7. The CG on recommendation of the Governance Committee can suspend/ revoke the approval to operate and manage regulatory sandbox, if:

   • The approved applicant has willfully furnished false information;

   • The approved applicant has failed to comply with the conditions and criteria based on which the approval for testing was granted;

   • It is necessary in the interest of national security/ public interest.