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Explained: How new rules for other service providers could ease working of BPO, ITeS players

OSPs or other service providers are companies or firms which provide secondary or tertiary services such as telemarketing, telebanking or telemedicine for various companies, banks or hospital chains, respectively.

Written by Aashish Aryan | New Delhi | Updated: November 9, 2020 3:01:40 pm
Explained: How new rules for other service providers could ease working of BPO, ITeS playersAs computers made their foray into the Indian information technology space, a number of such OSPs, which were either voice or non-voice based, came into the market.(Representational Image)

Nearly a year-and-a half after the Telecom Regulatory Authority of India had suggested relaxations of registration, submission of bank guarantee and other norms for other service providers (OSP) in the business process outsourcing (BPO) and information technology-enabled services (ITes), the Department of Telecom on Thursday eased these rules.

The new rules do away with the registration requirement for OSPs, with such BPOs that are engaged only in data work have been taken out of the category of OSPs altogether.

Why did OSPs require to register themselves in India?

OSPs or other service providers are companies or firms which provide secondary or tertiary services such as telemarketing, telebanking or telemedicine for various companies, banks or hospital chains, respectively.

As computers made their foray into the Indian information technology space, a number of such OSPs, which were either voice or non-voice based, came into the market. The sector required minimal investment but gave great returns in business, which prompted a large number of individuals and companies to float other service providing firms.

Since most of these firms used leased telephone lines, which in turn used the telecom spectrum auctioned by the Department of Telecommunications (DoT), the new telecom policy of 1999 suggested that all OSPs register themselves so that the government could keep a check on the usage of its resources.

Further, the registration was also made mandatory to ensure that firms did not establish fake OSPs which swindled customers under the garb of providing telebanking and other such sensitive services.

What were the various registration norms for OSPs?

To start services in India, OSPs had to register themselves with the DoT and declare to the government as to how many employees were working in the firm as well as the area of service it was engaged in. For example, if a firm wished to provide telebanking services, it had to tell the government the number of people working with the BPO and the state that firms catered to.

Further, the OSPs also have to declare whether they were providing services to domestic firms or international firms, and the nature of services being offered. The OSPs, which had to register themselves with the Ministry of Corporate Affairs also had to provide a detailed network diagram along with the details of the lines they had leased from an authorized and licensed telecom service provider.

In addition to all these norms, OSPs also had to furnish a bank guarantee to the DoT, which was kept as a security measure, and could be forfeited if the firm did not adhere strictly to the guidelines.

Why have these guidelines been changed?

In order to prevent the spread of Covid-19 pandemic, the government in March decided to go for a complete nationwide shutdown, in which all companies, barring those providing essential services, were asked to shut shop temporarily. Owing to this, the OSPs, like many other firms were unable to provide services to their clients such as banks and hospitals, which were under the category of essential services.

In order to facilitate work-from-home for such OSPs, the DoT on March 23, came out with a new format in which it sought the details of the OSP, their registration number and name of the telecom service provider again. Along with that, the DoT also sought the details of its employees working from home, their physical addresses, and the static internet protocol (IP) address from where the login would be made. 📣 Express Explained is now on Telegram

Subsequently, on April 15, to further ease the work-from-home process for OSPs, the DoT released new guidelines, under which it said that OSPs no longer had to make a security deposit or submit the work from home agreement it had with its employees. These rules were first extended till July 31, and later till December 31 this year.

On November 5, the DoT completely changed the guidelines and allowed permanent work from home or work from anywhere in India for OSP employees. Such employees working either from home or from remote locations would be treated as an extended agent or remote agent of the OSP. The new guidelines also do away with the need to furnish any bank guarantees for any of their location in India.

How will the new guidelines help OSPs?

The guidelines, released on November 5, will make it easier for BPOs and ITes firms in many ways, such as cutting down on the cost of location, rent for premises and other ancillary costs such as electricity and internet bills.

With the government recognising OSP employees as extended or remote agent, companies providing such services will no longer have to carry the additional compliance burden of providing the details of all such employees to the DoT. The doing away of registration norms will also mean that there will be no renewal of such licenses and therefore will invite foreign companies to set up or expand their other service providing units in India.

An important change, which takes data-based OSPs completely out of the ambit of BPOs would mean that such firms can function like any other service firm without the strict and cumbersome guidelines such as presence of agent on location. This change, in line with the norms of countries in the West can also allow employees to opt for freelancing for more than one company while working from home, thereby attracting more workers in the sector.

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