Trai Rejects DoT Call To Extend Registration/Scrutiny To OSPs


The sector regulator has rejected the telecom department’s call to extend mandatory registration and scrutiny formalities to data-based other service providers (OSPs), saying such a move would hurt efforts to ring in ease of doing business in the telecoms and BPO sectors.

An OSP, typically, provides IT-enabled business process outsourcing (BPO) services or others such as tele-banking, tele-medicine, tele-education, e-commerce to call-centre operations.

The Telecom Regulatory Authority of India (Trai) has stuck to its earlier recommendation that such registration formalities should only apply to voice-based OSPs offering outsourcing services by connecting with traditional circuit-switch or IP-based voice networks.

“Registration is not recommended for purely data-based OSPs having no connectivity to carry voice traffic…this will encourage faster roll out of data-based OSPs, resulting in ease of doing such businesses,” Trai said in its response on Monday to the Department of Telecommunications’ back reference on its October 2019 recommendations around upgrading the regulatory structure around OSP registrations.

While issuing recommendations last October around registering OSPs, Trai had said its suggestion to exempt data/internet-based OSPs from detailed registration was aimed to make India “a preferred BPO destination”.

It has also dismissed DoT’s call to mandate OSPs to furnish a graded bank guarantee (BG)– instead of the twin penalties proposed by Trai — for preempting violations around infrastructure-sharing, saying such a move would act as a potential barrier to the BPO business.

DoT, in its back-reference to the regulator, has said “a BG acts as a deterrent to discourage OSPs from indulging in violations,” and would also enable the penalty to be recovered, especially if an OSP fails to comply with the penalty order proposed by Trai.

But in its reply, Trai reiterated that the provisions around OSP registration should not act as a barrier for companies starting a BPO business. “Taking a bank guarantee is felt as one of such barriers,” it said.

It added that the BPO industry remained a very competitive market, which is why it is essential to keep “entry-level barriers low to attract the BPO business in the country”.

Trai, on its part, had recommended multiple financial penalties of Rs 50 lakh and Rs 1 crore for violations of infrastructure-sharing conditions by OSPs.

The regulator is also at odds with DoT’s call to mandate all contact-centre service providers (CCSPs) and hosted contact-centre service providers (HCCSPs) to apply for a virtual network operator (UL-VNO) permit with suitable authorisations.

Trai is of the view that CCSPs and HCCSPs, who only provide the contact-centre platform to OSPs but don’t own any telecom resources, do not require a VNO licence. Not mandating a VNO permit for such CCSPs and HCCSPs, it said, would also “encourage the provision of sharable infrastructure and use of latest cloud-based technologies”.

In its October 2019 recommendations, the regulator had suggested to DoT that only CCSPs/HCCSPs involved in reselling of telecom resources (such as bandwidth) to OSPs, should be mandated to obtain a VNO permit.

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