The Telecom Regulatory Authority of India has proposed a new licensing framework for internet-based linear television channels. This move could bring streaming aggregators under telecom regulations, potentially increasing compliance costs and data storage requirements for media and technology firms.
The Telecom Regulatory Authority of India (TRAI) has released recommendations to license Application-based Linear Television Distribution (ALTD) services. The proposal seeks to classify linear channels delivered via internet protocols as telecommunication services under the Telecommunications Act, 2023. This marks a potential shift in how digital streaming platforms are regulated in India, as it moves these services closer to the rules traditionally applied to telecom operators rather than standard internet applications.
Impact on Digital Platforms and FAST Market
The Free Ad-supported Streaming Television (FAST) market is a growing revenue stream for media companies. Projections indicate that revenue in this segment could cross ₹960 crore by 2027. Currently, these services operate with minimal regulatory barriers compared to traditional cable or DTH (Direct-to-Home) providers. Under the proposed framework, platforms would face new requirements to maintain IT infrastructure and user data within India. Furthermore, there is a suggested mandate for hardware manufacturers to facilitate the removal of unauthorized applications, which could alter the current relationship between smart TV makers and streaming service providers.
Regulatory and Legal Challenges
The proposal has faced scrutiny regarding its compatibility with existing frameworks, including the Digital Personal Data Protection Act, 2023. Legal observers have pointed out that treating internet-delivered content channels as telecommunication services may conflict with the open nature of the internet. There are also concerns that the distinction between news and non-news channels within the registration process could lead to constitutional challenges regarding freedom of speech, as the traditional reasoning for broadcast licensing—which is based on the scarcity of airwaves—does not apply to internet-based distribution.
Investor Monitorables
The Ministry of Information and Broadcasting is currently reviewing the TRAI recommendations. For investors, the key monitorable is the potential for increased compliance spending. If the final framework imposes strict licensing fees, technical requirements, or data localization norms, it could squeeze profit margins for smaller streaming aggregators and digital media companies. The industry will be tracking whether the government adopts a light-touch approach that considers the unique mechanics of the creator economy or if it applies rigid telecom licensing rules that could impact the growth trajectory of the digital media sector.