OSPs, or Other Service Providers, are businesses or organisations that offer secondary or tertiary services to other businesses, banks, or hospital networks, such as telemarketing, telebanking, or telemedicine. The government has recently revised the guidelines for the Other Service providers. Get to know more about the same in this article.
On 23 June 2021, the Department of Telecommunications issued newly revised guidelines for Revised Other Service provider (OSPs). These new amendment aim at further liberalization of rules and regulations applicable to OSPs. The guidelines issued in November 2020 were a first step toward providing relaxation.
It is outlined by the Union Minister of IT and communication that India’s BPO industry is one of the largest in the world. And the IT and Business process management industry of India is worth ₹2.8 lakhs crores which has the potential to reach ₹3.9 lakhs crores by 2025. This article will discuss the OSPs, the reasons for the new amendments, what these changes are, and their advantages.
What is the Other Service Provider (OSP)?
First, let’s look into the definition of Other Service Provider given in chapter 1 of notification no. 18-8/2020-CS-I(Pt.) dated 23 June 2021 is Another Service Provider (OSP) is an Indian Company, registered under the Indian Companies Act, 2013 or an LLP (Limited Liability Partnership) registered under LLP Act, 2008 or a partnership firm or an organization registered under Shops and Establishment Act providing voiced based Business Process Outsourcing services to their customers located worldwide including India.
In simple words, OSPs are the companies or firms that provide services like telecommunication, telemarketing, call center, telemedicine, etc., to different types of industries and clients. These OSPs provide these secondary and tertiary services by using the resources provided by Authorised Telecom Service Providers.
Reasons for Introducing the OSP Rules
India’s IT industry experienced huge growth in the 1990s. In this era of exponential growth, new Other Service Providers entered the market that provided BPO and IT-enabled services. The government felt that it requires rules and regulations to properly manage this growing sector that requires low capital investment but yields huge profits.
It was a new concept. There were chances of misuse of resources. Thus in the year, 1999 government introduced the first-ever guidelines for OSP.
The features of the November 2020 guidelines
Revised Other Service Provider (OSP) Rules aim toward the path of liberalization. November 2020 was the first step by the department of telecommunication in relaxing the regulations and providing more liberty to OSPs. Following are the changes that the 2020 guidelines have brought.
- No requirement for the registration certificates
- No need to furnish Bank Guarantees
- It provided OSPs to use VPN for the exchange of traffic and connect different centres of the OSP
- The requirement of reporting to the department of telecommunication was withdrawn
- No penalties
- It provided that OSPc can operate as, work from home, work from anywhere in India, Infrastructure sharing, and Centralised EPABX.
The Key Changes Brought by June 2021
The government has taken further steps to provide relaxation to OSPs, and these include:
- The guidelines removed the distinction between Domestic and International OSP. To facilitate OSPs to provide services to customers located in India and worldwide. It also permitted interconnectivity between all types of OSP centers
- It permitted EPABX of the OSP to be located even outside India, but OSP has to comply with all relevant Indian laws
- All the penalties have been removed by the government
- The new regulation supports interconnectivity among different OSP centres, whether of the same company or different companies. And voice interconnectivity is permitted between centres of the same company
- The non-voice BPO service providers will not be regulated by the regulations
- The regulations encouraged work from home and work from anywhere in India. The agents working in such a setup will be known as Remote Agents of OSPs. These remote agents can directly connect with the centralized EPABX or EPABX of OSP or customers using broadband.
Advantages of Revised Other Service Provider Guidelines
Business-friendly: These New guidelines have made things quite simpler for OSPs. Withdrawing registration requirements and bank guarantees have made an easy entry into the business. Companies and firms need not take proper permission before setting up BPO. This ease of doing business will attract more companies and will, give a boost to the industry and create huge jobs.
Worldwide Clients: The 2021 guidelines have removed the distinction between international OSP and Domestic OSP. Thus it has become easy for OSPs to provide services not only to Indian clients but clients residing in other parts of the world. The regulations have permitted interconnectivity between different centres of OSPs irrespective of the same company.
Work from home: the new regulations permit work from home and consider employees as remote agents. Thus, companies need not provide details of their remote employees. Thus relive OSPs from additional compliance. Moreover, it gives the opportunity for employees to work for more than one company as a freelancer.
Industry growth: The IT and BPM industry is rising, and it has huge potential. These new guidelines have provided flexibility to the OSPs that will help them progress. The reforms are not only advantageous to the workforce of the nation, but a feature like the flexibility of setting up EPABX in any part of the world help companies efficiently manage the resources.
Disadvantages of Revised Other Service Provider Guidelines
The new regulations are a boon for the industry, but there are a few downsides too. The relaxation of non-registration is an advantage in the early stages. But as the industries grow and new players enter the market, non-registration of these businesses can create more problems. Generally, a company with registration is considered more trustworthy and attracts more clients.
Another disadvantage is that the new amendments provide for self-regulation by OSPs. This provides huge freedom to the OSPs, and this might be misused by the companies and firms. This might negatively impact the industry. A regulatory system will properly manage the operations of the OSPs and will ensure efficiency.
Conclusion
The revised OSP rules 2020 and 2021 have radically changed the way OPSs function. These changes will work as catalysts for the growth of the BPM sector that will contribute economically to the nation. Reducing compliance requirements will result in cost reduction and will make India an attractive place to start a business. This will also support in Government’s Aatma Nirbhar Bharat initiative. You can also get in touch with Vakilsearch for resolving all your doubts. Our team of experts can provide clear insights on the topics. Book a slot with our experts and resolve your queries.
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