The legal and regulatory framework relating to other service provider (OSP) has a direct impact on India's outsourcing industry. Moreover, as provision of call centre services, IT enabled services and other support services today form integral part of businesses across sectors, the framework pertaining to OSP has attained greater significance over the course of last decade.

Unfortunately, the current set of terms applicable to entities registered with Department of Telecommunications (DoT) as an OSP (OSP Guidelines) are shrouded with outdated and ambiguous provisions making it challenging for businesses to operate in the present day environment. For a long time now, the industry has been unanimous in its request for revamping the OSP Guidelines and specifically, the demand for permitted usage of cloud based services, utilising EPABX located in foreign jurisdictions, work from home for OSPs have gained significant traction in recent times .

The Government has acknowledged that there is a need for simplification of the provisions of the OSP Guidelines, issued by DoT. In the month of October 2019, based on DoT's instructions, Telecom Regulatory Authority of India (TRAI) had issued its recommendations on 'Review of Terms and Conditions for registration of Other Service Providers' (Recommendations) to DoT. In these Recommendations, TRAI had provided its suggestions on key changes required in the legal and regulatory framework applicable to OSPs.

The DoT has recently referred few of the issues, deliberated in the Recommendations, to TRAI for reconsideration and clarification (Back Reference). In a swift development, TRAI has responded to the issues highlighted in the Back Reference by way of recommendations dated 28 September 2020 (Response).

Recent developments

The table set out below provides a high-level overview on recent developments pertaining to OSP framework.

Serial No.

TRAI Recommendations

DoT's views on TRAI Recommendations

TRAI's Response to Back Reference


Issue: Categorisation of voice and data-based usage in respect of OSP

In its Recommendations, TRAI had suggested categorisation of OSPs depending on whether the OSP provides: (a) voice-based services (using voice calls in providing services) (Voice Based OSPs) or (b) data or internet based services with no voice connectivity involved (Data Based OSPs).

TRAI had suggested that for Data Based OSPs, registration should be granted on the basis of filing of an intimation by an OSP applicant instead of requiring the OSP provider to complete full-fledged registration process that entails prior approval of DoT.

DoT has noted that in today's world both voice and data are transported as data packets over IP networks, and therefore, categorisation of OSPs based on voice or data is unwarranted. It noted that OSPs can misuse data/internet for transiting voice calls.

TRAI has clarified that Voice Based OSPs are those which provide outsourcing services using voice connectivity such as PSTN, PLMN or IP based voice service network, whereas the Data Based OSPs undertake outsourcing work by only using internet. It stated that Voice Based OSPs need monitoring with regard to toll (NLD/ILD) bypass concerns which is not the case with Data Based OSPs.

TRAI has advocated that Data Based OSPs should be given boost for faster roll out enabling ease of doing business.

KCO Comment: There is a clear difference in TRAI's and DoT's approach on this issue of categorisation of OSP and the ball is in DoT's court now. Possibly, by Voice Based OSPs, TRAI has referred to OSPs using PSTN to provide services and Data Based OSPs as OSPs using internet only. Therefore, TRAI's distinction between the two types of OSPs from toll bypass perspective is an apt distinction and much required for enabling ease of doing business in India.


Issue: Applicability of regulatory framework on CCSPs/HCCSPs

The contact centre service providers (CCSPs) or hosted contact centre service providers (HCCSPs) (collectively, Service Providers) providing 'platform as a service' including services such as EPABX, call handling, call recording, contact centre data analytics etc. as a service for contact centres should be required to register with DoT on the lines of an OSP registration.

Additionally, TRAI had recommended that such companies should be Indian companies having their data centres in India for provision of services.

It had suggested that Service Providers providing platform as a service and involved in reselling of telecom resources to OSPs should be required to obtain virtual network operator (VNO) license from DoT.

According to DoT, Service Providers are involved in collection, carriage and delivery of the message and hence, such entities should hold licence under the Indian Telegraph Act, 1885. Accordingly, all Service Providers should be mandated to have telecom license i.e. UL/ UL VNO licence with suitable authorisation(s), as applicable.

The suitable authorisations under UL/ UL VNO would depend on the services that the Service Provider is offering/reselling to the OSPs e.g. Access authorisation (for switching), ISP authorisation (for internet), NLD authorisation, ILD authorisation etc.

TRAI has disagreed with DoT's view that all Service Providers are involved in collection, carriage and delivery of message, as there is no switching functionality in the operations of Service Providers providing platform as a services with telecom resources being obtained from licensed telecom service provider ("TSP").

It has also referred to its Recommendations where it had suggested that Service Providers involved in reselling telecom services will need to procure VNO license.

KCO Comment: There is a difference in TRAI's and DoT's interpretation of services offered by Service Providers and importantly, DoT considers them to be providing services which are akin to telecom services triggering license requirements. The views of TRAI on Service Providers not requiring a telecom license may simplify the regulatory requirements and enable entry of global Service Providers to India.


Issue: EPABX or call manager for international OSPs

In the Recommendations, TRAI had noted that in case of international OSPs, EPABX at foreign location may be allowed subject to OSPs providing remote access to the EPABX and authenticated copy of call details records (CDR), system logs and message details as and when required.

In DoT's view, OSP should maintain a copy of system logs and message details etc. and such data should be stored in its centre in India.

Further, it requires data to be updated on near real time basis. Over and above, DoT will need clearance from Ministry of Home Affairs (MHA) for this setup.

TRAI has referred to its Recommendations stating that security concerns can be finalised by DoT in consultation with Telecom Engineering Centre (TEC).

KCO Comment: As this issue relates to security concern, TRAI has agreed with DoT's suggestion on maintaining a copy of logs and storing such data within OSP centre. The key takeaway is that both TRAI and DoT seem to agree that subject to certain conditions, EPABX for international OSPs can be hosted outside India. However, we will have to wait for MHA and TEC's view on this issue.


Issue: Work from home provisions

In the Recommendations, TRAI had suggested the following:

· Removal of requirement to procure VPN from TSPs (PPVPN) while availing work from home (WFH) facility and instead suggested that any commercially viable VPN could be used.

· It had also suggested to do away with requirement to furnish a bank guarantee (BG) and execution of an agreement with DoT to avail WFH facility for OSP employees.

· It had only stipulated a requirement to provide a prior intimation in case of WFH along with specific details.

DoT has differed from TRAI and suggested that commercially available VPN may not be allowed. It has reiterated its views on usage of PPVPN.

As an alternative measure, DoT is of the view that OSPs may use any secured VPN/secured connectivity configured using static IP or dynamic IP (from the pool of IP assigned for WFH) for interconnection between OSP centre and home of the agents, which model is similar to the current relaxations issued by DoT (Current Relaxation) in March and April 2020 for WFH.

Importantly, DoT has noted that server or gateway infrastructure for secured VPN/secured connectivity should be located in India (at OSP premises or with CCSPs).

DoT has opposed removal of BG related requirements.

TRAI has provided its rationale for removal of PPVPN and advocated usage of VPN over internet which will make WFH facility flexible. It has also noted that usage of PPVPN lacks flexibility. However, on account of security concerns, TRAI has agreed with proposal of DoT for configuring secured VPN connectivity by OSPs.

KCO Comment: TRAI has disagreed with DoT's suggestion on PPVPN but has agreed to proposal regarding using secured VPN as it relates to national security. TRAI has reiterated its views on discontinuing BG and agreement execution formalities.

In our view, both TRAI and DoT agree that Current Relaxation may be a model that can be made permanent going forward. Further, DoT's view that gateway infrastructure for secured VPN can be located at any location with the OSP or with CCSP is also an important one and may relieve many OSPs from making such arrangements for each OSP centre. Further, those OSPs whose gateway for secured VPN is outside India, may have to deploy infrastructure within India at one of their OSP centres in future. However, the final decision is yet to be made by DoT.

In addition, following aspects have also been deliberated between TRAI and DoT:

  • BG for sharing of infrastructure and WFH: While TRAI has reiterated its earlier position to remove requirements related to BG and agreement, DoT is reluctant to remove BG requirements.
  • Network diagram: DoT and TRAI have disagreed and taken distinct position on whether a domestic OSPs need to get its network diagram attested by TSPs.
  • Penalty: Broadly, TRAI is in favour of a fixed financial penalty for OSP related violations whereas DoT has suggested imposing of penalty that is commensurate to the nature of violation. TRAI has responded stating that discretion in imposing penalty is a complex process and is likely to be challenged, however, it agrees with DoT that penalty should be imposed depending on the nature of violation.

Khaitan comment

It is assuring to note that DoT is considering TRAI Recommendations and only couple of issues have been highlighted to TRAI in its Back Reference. Any reference to TRAI on large number of outstanding issues may have caused further delay in implementing the overhaul of the OSP Guidelines. This may also be interpreted to mean that DoT does not require TRAI's inputs on other aspects.

In view of long-standing concerns of industry, TRAI has also acted swiftly on the matter and issued its Response within two days of receiving the Back Reference even though it comprised of numerous matters for TRAI's consideration. The recent developments also provide much needed insight on DoT's approach.

It is noteworthy that DoT and TRAI are aligned on the issue of foreign EPABX that remains as one of the key concern areas for the industry. Moreover, DoT and TRAI have also agreed on usage of secured VPN for WFH facility which is monumental given the present circumstances where offices across the country still remain inaccessible. All of these aspects are subject to further deliberation by DoT and only a final outcome will bring clarity to these long-standing contentious issues.

The content of this document do not necessarily reflect the views/position of Khaitan & Co but remain solely those of the author(s). For any further queries or follow up please contact Khaitan & Co at