ERGO analyzes developments impacting business: mandatory testing and certification of telecom equipment; regulatory overlaps pave the way for exemptions

Introduction

On May 24, 2022, the Telecommunications Engineering Center (THIS) exempted certain categories of telegraphs from the “compulsory testing and certification of telecommunications equipment” (MTCTE) requirements set out in the Indian Telegraph Rules 1951 (as amended) (Telegraph rules) due to overlapping certification requirements for some electronic equipment.

In terms of telegraph rules, the responsibility to comply with MTCTE requirements lies with the original equipment manufacturers (OEM) or foreign importers/equipment manufacturers prior to the sale or importation of such telecom equipment into India. In the absence of MTCTE, the sale of such a telegraph is prohibited.

Since the exempted equipment/telegraph relates to popular and widely used categories of telecommunications equipment, this exemption notification (Notice of Exemption) will be particularly relevant for OEMs and importers of such telecommunications equipment.

Background

In the background, any “telegraph” (which has been given a rather broad definition under the Indian Telegraph Act, 1885) capable of being used with any telegraph established, maintained or operated under a telecommunications license granted by the Department of Telecommunications (Point) must first undergo compulsory testing and certification with respect to the parameters determined by the competent telegraph authority, namely the TEC.

Following the Electronics and Information Technology (Mandatory Registration Requirement) Order 2012 (ORC command), the Ministry of Electronics and Information Technology (MEITE) has prescribed certain standards for various electronic equipment. In accordance with this framework, the MEITY also conducts mandatory registration of specified goods (which include but are not limited to laptop computers, point-of-sale terminals and other electronic equipment). The CRO Order has also been updated by the Electronics and Information Technology Products (Compulsory Registration Requirement) Order 2021. Some new categories of electronic equipment have been added, such as smart watches, mobile phones, smart card readers, smart speakers, etc.

This resulted in some regulatory overlap, as the TEC had also prescribed certain requirements for mandatory testing and certification of, among others, smart cameras, smart watches, smart electricity meters, tracking devices, IoT gateways , points of sale (point of sale) devices, etc. under the MTCTE regime.

These overlapping certification requirements, among others, have resulted in increased compliance burdens and costs for entities in this industry. In this context, a press release was issued on April 30, 2022 regarding the regulatory overlap with mandatory testing procedures. Acknowledging the statements made by the industry and the costs of compliance, the press release noted that the DoT (in consultation with MEITY) decided to exempt certain telecommunications equipment, which led to the publication of the this notice of exemption.

Notably, the telegraph rules recognize that certain telegraphs (e.g. telegraphs imported for research and development purposes in India, etc. or any other class of telegraphs) may be exempted from MTCTE requirements by an order of the TEC.

In exercising this authority, TEC formally issued the Exemption Notice on May 24, 2022 exempting the following categories of telegraphs from the MTCTE requirements: (1) Mobile User Equipment/Mobile Handset; (2) server; (3) smart watch; (4) smart camera; and (5) PoS devices.

Compliance with the MTCTE regime

To facilitate the MTCTE, the TEC has set up an online portal with details of, among other things, essential requirements and safety requirements for the MTCTE process with respect to certain types of telegraph/telecom equipment. The TEC from time to time publishes various ER tests or parameters relating to various telegraph/telecom equipment with, among other things, the objective of ensuring that the equipment meets the relevant national and international standards, does not degrade the performance of the existing network to which it is connected, etc. In addition, telecom licensees/telecom service providers (PST) are expressly forbidden to use on their network any telegraph that does not have the required certification.

Comment

The interaction of the legal and regulatory framework relating to the information technology sector and the telecommunications sector is more important than ever with the advent of smart devices and the Internet of Things (IoT) services. Although the exemption notification helps to resolve the regulatory overlap, it is unclear if it is entirely sufficient, as some categories of IoT devices remain within the scope of the TEC and others with the MEITY.

Going forward, it will be important to harmonize these regulatory frameworks as smart devices are expected to gain momentum in India with the emergence of 5G. Nonetheless, this exemption notification is a relief to affected stakeholders such as OEMs and will hopefully result in a simplified regulatory regime to promote the ease of doing business in this sector.

The contents of this document do not necessarily reflect the views/positions of Khaitan & Co but remain solely those of the authors. For any other questions or follow-up, please contact Khaitan & Co at [email protected].

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