Who are “Other Service Providers” (OSPs)
The New Telecom Policy, 1999 (“Policy”) was introduced by the Government of India to regulate the telecom sector and attract investments by developing the communication infrastructure. The regulations for Other Service Provider (“OSP”) were introduced under the said Policy. The terms & conditions for OSPs were introduced later in February 2000 and were revised by the Department of Telecommunication (“DoT”) vide the Revised Terms and Conditions – Other Service Provider (OSP) Category[1] in 2008 (“Regulations”). By way of various amendments these Regulations were further revised from time to time.
An OSP should be a company registered under the Companies Act, 2013 or Limited Liability Partnership (LLP) providing Application Services such as tele-banking, tele-medicine, tele-education, tele-trading, e-commerce, call centre, network operation centre and other IT Enabled Services, by using Telecom Resources provided by authorized Telecom Service Providers.
Telecom Resource are the telecom facilities which are used by the OSPs such as Public Switched Telecom Network (PSTN), Public Land Mobile Network (PLMN), Integrated Services Digital Network (ISDN) and /or the telecom bandwidth provided by authorized telecom service provider having valid license under the Indian Telegraph Act, 1885. These Application Services are provided using Telecom Resources which are provided by Telecom Service Providers (“TSP”).
OSPs are regulated by mandatory licenses issued by the DoT, which they need to obtain to undertake such Application Services. The registration of OSPs are done by the respective Telecom Enforcement, Resource and Monitoring (TERM) cells as per the location of the OSP.
What are the types of OSPs
The OSPs are categorized into following:
Domestic OSP: OSP providing Application Services within national boundaries.
International OSP: OSP providing Application Services beyond national boundaries.
Another category of OSPs are called Hot Sites, which are standby OSP centres to be used in case of disaster/ emergency situations only.
Important General terms and conditions for Domestic and International OSPs
The domestic and international OSPs are required to comply with the following general terms and conditions:
- OSP registration can be obtained only by a company registered under Companies Act, 2013, or by an LLP registered under the LLP Act, 2008[2].
- OSPs are not permitted to infringe on the jurisdiction of other authorized TSP and are not permitted to provide switched telephony.
- The authorized TSP should provide Telecom Resources to the OSP after examining the Network Diagram of the network proposed to be setup by the OSP and after ensuring its bonafide use. The OSPs are required to submit network diagram approved by the TSP to TERM Cells.
- OSPs may obtain internet connectivity from the authorized Internet Service Provider.
- OSP is permitted to share the Telecom bandwitdth with other activities of the same company or group of companies. However, the OSP is required to ensure that there is logical separation between the Telecom Resources for OSP and the Telecom Resources for their other activities. There should not be voice/non-voice traffic flow between them.
- Interconnectivity of the International OSP with Domestic OSP is not permitted.
The Regulations also enumerate certain terms and conditions with the specific to Domestic OSP and International OSP.
What is the processing fee
A nominal processing fee is payable along with the application for registration in favor of the concerned accounts officer of the registering authority.
Validity of license
An OSP registration is valid for an initial period of 20 years from the date of issue which may be extended up to further 10 years.
Multiple OSP registrations
The OSP registration is location specific and may be obtained for multiple locations.
Suspension, Revocation or Termination of Registration
The DoT has been authorized to suspend, revoke or terminate the OSP registration in public interest or in the interest of the security of the State without any responsibility for any loss or damage caused by it.
Sharing of infrastructure between International and Domestic OSPs
The Domestic OSP and International OSP are permitted to share the infrastructure provided that they belong to the same company and the OSP has a setup of minimum fifty (50) seats in the call centre. The sharing of infrastructure is valid for a period of 3 years extendable for further period. Another important aspect is that while sharing the infrastructure there should be logical portioning of the EPABX. Sharing of infrastructure attracts the obligation of a security deposit in the form of a Bank Guarantee which ranges from Rs. 5-10 million.[3]
The Regulations also enumerate certain terms and conditions in case of sharing of infrastructure between International and Domestic OSPs.
Work from home
The concept of Extended Agent Position (Work From Home) is permitted subject to certain obligations such as payment of security deposit in the form of a Bank Guarantee of Rs. 10 million[4]. In this regard, permission from the DoT is mandatory.
Voice over Internet Protocol
There are certain restrictions that are imposed on the OSPs and one important one being the use of Foreign VoIP minutes which is not permissible by OSPs.
Additional facilities introduced through amendments
The facilities provided to OSPs have been added by way of amendments and included sharing of EPABX with international call centres and restricting extended agent position to SSAs.[5] Additional facilities were added including allowing OSPs to have distributed architecture of EPABX for their OSP centres across India and allowing the use of Closed User Group (“CUG”)[6] for their internal communication needs.
Inspection and Prohibition of Activities of OSPs
The DoT has the right to inspect the sites used for extending the service and it may also conduct inquiry to determine if the terms and conditions has been breached including inspection of all the equipment used by the OSP. Further, an OSP is not permitted to engage (on the basis of the Registration under this Policy) in providing any other service which requires a separate License. OSPs also need to take measures to ensure that no obscene or objectionable content or communications are being carried on the network.
Recent Developments
While the Government regulations need to keep pace with ever changing technology, the policy of the Government for ease of doing business is the paramount need of the hour. In furtherance of the same, the DoT has sought recommendations of the Telecom Regulators Authority of India (hereinafter “TRAI”) for reviewing the technical, financial and regulatory requirements and terms and conditions for the registration of OSPs. In this regard, TRAI has recently published a Consultation Paper[7] for review of the terms and conditions for OSPs. Vide the said Consultation Paper all the stakeholders have been requested to provide their views which is an encouraging step.
The author is a Corporate and M&A lawyer at Sarin Partners Advocates & Legal Consultants. The views in the article should not be construed as legal advice. Please contact the author for any clarification.
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[1] Amendment No. 18-2/2008-CS-I dated August 5, 2008
[2] Amendment No. 18-5/2009/-CS-I dated 12.01.2016
[3] Amendment No. 18-1/2009-CS-1 dated 25.02.2009
[4] Amendment No. 18-2/2009/-CS-I dated 22.05.2009
[5] Amendment No. 18-5/2009/-CS-I dated 07.10.2011
[6] Amendment No. 18-5/2012/-CS-I dated 21.11.2012
[7] Consultation Paper No: 02/2019 dated March 29, 2019