An industry that has rallied over 800 million telecom users and expects to cross the 1 billion mark by 2014 needs a regulator with more teeth.

This has been a long-standing demand of the Telecom Regulatory Authority of India (TRAI), which has not been able to ensure that operators comply with policy decisions.

With the new telecom policy under way, the Ministry of Communications and IT is finally considering giving more authority to TRAI. This will, it expects, ensure some stability in the sector that has been rocked by poor policy-making, frequent controversies and now, the indignity of the graft case.

The proposed move would confer powers of a civil court on TRAI, a status given to other sectoral regulators including the Securities and Exchange Board of India and the Competition Commission. Once the TRAI Act is amended, the regulator can summon persons and examine them on oath, demand documents and evidence on affidavits and, in appropriate cases, call for expert assistance in conducting inquiries.

TRAI will also have the power to impose monetary penalties of up to Rs 500 million on a licensee for non-compliance with licence terms and conditions.

In addition, the regulator will have overriding powers when it comes to interconnection issues and its decision in these will be binding. Operators will not be able to challenge it in the telecom disputes tribunal. This act assumes special significance in the wake of the incumbent operators opposing TRAI’s current efforts to change the interconnection regime. Operators have questioned the rationale of giving TRAI the powers of a civil court as it would be an infringement of the telecom tribunal’s role.

Nevertheless, by and large, the proposed move to give more muscle to the regulator is being seen as a good one. It will ensure order in the sector, which currently has over 15 operators jostling for market share. Stability in the industry will enable consolidation and reassure investors to continue financing the world’s fastest growing telecom market.

However, with no timeline fixed yet for amending the TRAI Act, it could be a long while before any change is effected, if at all. Given the other failed attempts in the past to empower TRAI, the question is, will the ministry succeed?