Centre Notifies Telecommunications (Regulatory Sandbox) Rules, 2026

• 23 Oct 2026
• 176 Views

The Union Government recently notified Telecommunications (Regulatory Sandbox) Rules, 2026. These rules enable eligible companies, startups, researchers and individuals to test new telecom technologies, products, services and business models while adhering to regulatory conditions. The new rules permit government to grant exemptions from certain requirements outlined under Telecommunications Act 2023 and Telecom Regulatory Authority of India Act 1997 as long as certain conditions are met.

These rules came into effect on 21 October 2026, i.e., the same date they were published in the Official Gazette. They follow the release of draft Telecommunications Regulatory Sandbox Rules 2024 that were published on 27 November 2024. The government has stated that it took into account the objections as well as suggestions received before finalizing the rules. 

Who Can Apply for Telecom Regulatory Sandbox?

According to the notified rules, eligible applicants for the telecom regulatory sandbox include authorized entities, companies, societies, partnership firms, statutory bodies, Indian citizens and research and development institutions recognized by the Department of Science and Technology.

Applicants must submit proposals in prescribed format along with reports of limited testing conducted in offline or laboratory environments. They should include results from other tests as well, including those conducted on experimental isolated networks as specified in the notification. 

Additionally, applicants must provide details of any regulatory exemptions required and include other documents as specified by government. A non-refundable processing fee of Rs. 10,000 is required to be paid by all the applicants. The government will assess the proposals and has the authority to accept or reject them. It can also create a regulatory sandbox on its own initiative after evaluating the need.

Testing Timeline and Regulatory Exemptions 

The government will define the scope, objectives, eligibility criteria, testing conditions, risk management requirements and reporting obligations for each and every sandbox. A regulatory sandbox can operate for a maximum of 24 months. The government may extend this period by up to 12 months at a time provided that a request for extension is submitted at least 30 days prior to the expiry of the existing validity period and meets prescribed conditions.

Any exemptions from the provisions of the TRAI Act 1997 require prior consultation with the Telecom Regulatory Authority of India. Based on the testing reports and results, the government can allow the sandbox to continue under revised conditions, direct its closure or give permission to move towards the commercial deployment of a product, service or business model in accordance with applicable laws as detailed in the notification. 

User Safety and Test Monitoring 

Applicants who receive approval from government must adhere to all the applicable data protection, security and other relevant laws. They need to set up appropriate mechanisms to enrol eligible participants, monitor testing and maintain records of test parameters, testing areas and results. When testing involves users, applicants must clearly explain the purpose and scope of the testing, obtain prior consent from users and ensure that users are not charged for participating in the test environment.

Products, services, technologies, processes and business models being tested must not be commercially available in market during testing period. Applicants must retain records of the testing, including work plans, methodologies and user consent documents for at least one year after sandbox expires or longer if required by government. 

Additionally, applicants must maintain confidentiality regarding the sandbox, its tests and results. The government may publish general information about sandboxes, approved applicants and participants without disclosure of any proprietary information. 

Regulatory Monitoring & Submission of Testing Reports

As specified in the notified rules, the government can monitor as well as assess each sandbox, ask for reports and data from the approval applicants. It may also issue directions so as to ensure compliance and protect participants as well as test users. Approved applicants are required to submit a comprehensive report within 15 days of completing their testing or at least 30 days before the expiration of the sandbox's validity period, whichever is applicable. 

The report must include test results, user feedback, complaints, security issues, challenges faced, risk mitigation measures and details regarding the closure of activities, including the settlement of contractual and financial obligations. The government reserves the right to suspend or revoke approval if an applicant submits false information, fails to comply with the approval conditions or does not ensure compliance by participants as specified in the rules. 

Furthermore, the government may take action if a sandbox disrupts an authorized entity's telecom network or if suspension/revocation is necessary for reasons of national security or public interest. 

Source:- Business Standard