Centre notifies new telecom sandbox rules: What exemptions can companies seek and what are the limits?
The Centre has notified new rules allowing eligible applicants to test innovative telecom technologies, services, products and business models in a controlled regulatory environment, with exemptions from specified regulatory requirements for the duration of the trial.
The Telecommunications (Regulatory Sandbox) Rules, 2026, by the Department of Telecommunications (DoT), provide a framework for applicants to seek exemptions from authorisation, assignment and other requirements under the Telecommunications Act, 2023, and rules made under it, as well as provisions of the Telecom Regulatory Authority of India (TRAI) Act, 1997, where required for testing.
However, the exemptions are not automatic or blanket relaxations. Applicants must specify the exemptions they need, and the government will assess their proposals before accepting or rejecting them.
What exemptions can companies seek?
Under the new rules, applicants can seek exemptions from requirements relating to authorisation or assignment, as well as other provisions under the Telecommunications Act, 2023, and the rules made under it. They can also seek exemptions from provisions of the TRAI Act, 1997, and regulations made under it, where required for the proposed sandbox.
The exemptions granted will be specified for the validity period of the regulatory sandbox. The government may also set conditions covering the scope and objectives of the trial, eligibility of participants, the technologies or services being tested, risk management, reporting requirements and an exit strategy.
Applicants must submit their proposals through the designated government portal, along with reports of limited testing conducted offline or in a laboratory, reports of other testing, including in experimental isolated networks, and any other documents or information required by the government.
They must also specify the exemptions sought and pay a non-refundable processing fee of ₹10,000.
Who can apply?
The rules define applicants to include authorised entities, companies, societies, partnership firms and statutory bodies duly incorporated, registered or constituted under Indian law. Indian citizens and research and development institutions recognised by the Department of Science and Technology are also eligible to apply.
The government may examine a proposal’s eligibility and seek additional information before deciding whether to accept or reject it.
How long can a telecom sandbox operate?
A regulatory sandbox can initially operate for up to 24 months. The government may extend its validity by a further period of up to 12 months at a time, if it considers an extension necessary.
An approved applicant seeking an extension must submit a request at least 30 days before the existing validity period expires, along with a justification and the purpose of the extension.
What are the limits of the exemptions?
The rules impose several conditions on approved applicants and participants.
Commercial sale is prohibited during testing: Telecom services, technologies, products, processes and business models being tested cannot be commercially available in the market during the sandbox period. Permission to conduct a trial does not itself amount to approval for a commercial launch.
User consent is mandatory: Where trials involve users, applicants must explain the purpose and scope of the testing and obtain users’ prior consent. Participants cannot be charged for taking part in the test environment.
Data protection and security laws continue to apply: Approved applicants must ensure that they and their participants comply with laws relating to data protection and security, along with other applicable laws.
Testing records must be retained: Applicants must preserve records, including work plans, testing methodologies, user-consent records and other relevant data, for at least one year after the sandbox expires. The government may require a longer retention period. The records must subsequently be destroyed securely.
The government retains oversight: The Centre can monitor and evaluate a sandbox, demand reports and data, issue directions, and require physical or virtual access to the testing environment. Approved applicants must submit a comprehensive report covering test results, user feedback, complaints, security issues, challenges and risk-mitigation measures.
When can a tested technology be commercialised?
Commercial deployment is not guaranteed at the end of a trial. After reviewing the information and reports submitted by an approved applicant, the government may allow the sandbox to continue under revised conditions, order its closure, or permit steps necessary to enable commercial deployment under the Telecommunications Act and the rules made under it.
