Telecom Ministry Announces Further Liberalised Guidelines For Other Service Providers

The Department of Telecommunication has further liberalised the standards for Other Service Providers (OSPs), said Ravi Shankar Prasad, Union Minister for Electronics and Information Technology, Communications, and Law and Justice, during a press meet on 23 June.

These are Business Process Outsourcing (BPO) companies that provide voice-based services in India and overseas. In addition to the main adjustments already announced and implemented in November 2020, the latest guidelines further liberalised the exceptional dispensation offered to OSPs. According to the minister, India's BPO industry is one of the world's largest. Currently, India's Information Technology Business Process Management or IT-BPM industry is worth $37.6 billion (2019-20) or roughly Rs 2.8 lakh crore, employing lakhs of young adults across the country. Even by the year 2025, it also has the scope for double-digit growth, with a market value of up to $55.5 billion or Rs 3.9 lakh crore, stated the PIB news release.

Aatma Nirbhar Bharat (Self-reliant India) is the government's flagship initiative, led by Prime Minister Narendra Modi, and in this case, steps such as the Electronic Manufacturing Productivity Linked Incentive scheme, the launch of a dedicated Electronic Manufacturing Cluster scheme and a dedicated PLI scheme for telecom equipment are just a few examples.

Ease of Doing Business is another key part around which the Center has launched a series of reforms in the IT and telecom sectors. The introduction of one-touch VNO (Virtual Network Operators) licences, spectrum sharing and trading delicensing of specific frequency bands, and now the liberalisation of the NextGen OSP are all steps in the right direction.

Those liberalised OSP guidelines from last year included data related OSPs, were taken out of the ambit of any regulation, no bank guarantees, no requirement of a static internet protocol or IP, no requirement of reporting to the Department of Telecommunication, no requirement of publication of Network Diagram (a visual representation of network architecture), no penalties and made work from anywhere a reality.

Despite the pandemic, the BPM industry revenues increased from $37.6 billion (over Rs 2 lakh crore) in 2019-2020 to $38.5 billion in 2020-2021. This was made feasible in large part by the industry's capacity to operate remotely, as well as the centre's relaxation of work from home rules under the OSP regime, first temporarily in March 2020 and then permanently in November last year. The current BPM market is worth $198 billion, while the number for the outsourcing market is $91 billion.

With the latest liberalised guidelines, there is no longer a distinction between domestic and international OSPs, while now interconnectivity between all types of OSP centres is possible. Customers from all across the world, including India, can now be served by a BPO centre with shared telecom resources. It was also announced that the OSP's Electronic Private Automatic Branch Exchange or EPABX—a private telephone network used by organisations and businesses for a variety of purposes—can be positioned anywhere in the world. Apart from using Telecom Service Providers' EPABX services, OSPs can also host their EPABX at third-party data centres in India.

"Remote agents of OSP can now connect directly with the centralised EPABX/ EPABX of the OSP/ EPABX of the customer using any technology including broadband over wireline/ wireless," stated the report, which also added that there are no data interconnection restrictions between OSP centres of the same firm, group company or unrelated organisation.

The ministry believes that further liberalisation of guidelines will provide a significant boost to India's OSP business and a plethora of options, revenue, as well as jobs. The latest legislation is also expected to assist the BPM industry in lowering its startup costs and fostering synergies among businesses. Increased multinational corporations or MNCs will be lured to India as a favourable location as a result of these reforms, resulting in more foreign direct investments.

In April 2021, the National Association of Software and Service Companies (NASSCOM) performed an impact survey on OSP reforms, which revealed that more than 72 per cent of respondents expressed that OSP reforms have made a significant difference in their lives, while 95 per cent mentioned that it had helped to reduce the burden of compliance and the expense of doing business in the country.

Additionally, 95 per cent of the survey participants agreed that this would help make IT services more competitive on a global scale, while 77 per cent stated that the OSP reforms have aided in enhancing productivity. It was also found that according to 92 per cent of respondents, such reforms helped enterprises reduce their financial load and based on the OSP reforms, 62 per cent of respondents said they would explore expanding their operations or making new investments. Lastly, 55 per cent of participants noted that it would assist in generating new job possibilities and improving access to talent.