TRAI releases Consultation Paper on “Encouraging Innovative Technologies, Services, Use Cases, and Business Models through Regulatory Sandbox in Digital Communication Sector”

Source: The post is based on the article “TRAI releases Consultation Paper on “Encouraging Innovative Technologies, Services, Use Cases, and Business Models through Regulatory Sandbox in Digital Communication Sector” published in PIB on 23rd June 2023

What is the News?

Telecom Regulatory Authority of India(TRAI) has released a Consultation Paper on “Encouraging Innovative Technologies, Services, Use Cases, and Business Models through Regulatory Sandbox in Digital Communication Sector”.

What is a regulatory sandbox?

Regulatory sandbox refers to live testing of new products or services in a controlled regulatory environment. 

It acts as a “safe space” for business as the regulators may or may not permit certain relaxations for the limited purpose of testing. 

The sandbox allows the regulator, the innovators, the financial service providers and the customers to conduct field tests to collect evidence on the benefits and risks of new financial innovations, while carefully monitoring and containing their risks. 

What are the benefits of a regulatory sandbox?

Firstly, regulators obtain first-hand empirical evidence on the benefits and risks of emerging technologies and their implications, enabling them to take a considered view on the regulatory changes or new regulations that may be needed to support useful innovation, while containing the attendant risks.

Secondly, users of a sandbox can test the product’s viability without the need for a larger and more expensive roll-out. If the product appears to have the potential to be successful, the product might then be authorized and brought to the broader market more quickly.

Why regulatory sandbox in the Digital Communication sector?

Regulatory bodies in many countries have established sandbox frameworks for telecom tech innovation. 

These frameworks aim to promote regulators’ desire for innovation with economic resilience and consumer protection. 

In this background, the Department of Telecom (DoT) had requested TRAI to provide recommendations on a framework for the regulatory sandbox.