OSP Open House Discussion with TRAI

July 2019

On March 29, 2019, the Telecom Regulatory Authority of India (“TRAI”) released a Consultation Paper on Review of Terms and Conditions for registration of Other Service Providers, which was open for comments and counter-comments upto May 20, 2019 and June 3, 2019, respectively. Thereafter, an open house discussion was conducted on July 15, 2019 at New Delhi, where TRAI granted all attendees a week’s time from July 15 to make additional submissions, if any.

This alert briefly summarizes key points raised by the stakeholders during the open house.

On July 15, 2019, TRAI organized an Open House Discussion (“OHD”) on Consultation Paper on Review of Terms and Conditions for registration of Other Service Providers (“OSPs”) with an aim to rationalize and liberalise the existing terms and conditions. The OHD was attended by multiple stakeholders who shared insightful comments and suggestions while emphasizing the need for a forward-looking OSP regime with focus on ease of doing business.

Some of the comments were centered on the ambiguity and subjectivity in the definition of “Application Services.” The term “Application Services” is provided within the definition of an OSP. The revised terms and conditions for OSPs issued by the Department of Telecommunications on August 5, 2008, define OSP as “a company providing Application Services.” They also define “Application Services” as “providing services like tele-banking, tele-medicine, tele-education, tele-trading, e-commerce, call centre, network operation center and other IT Enabled Services by using telecom resources provided by authorized telecom service providers.” However, they are silent on the meaning and scope of “other IT enabled services.”

Key comments from the OHD are captured below:

  • Majority stakholders were of the view that the term “Application Services” should be construed narrowly. Service providers offering voice-based services like call centres should be included and those providing data and internet services should be excluded from the ambit of OSP registration.
  • One stakeholder urged TRAI to revisit the initial reasons for imposing restrictions on OSPs and assess if those are still applicable. For instance, the concern regarding revenue loss to Telecom Service Providers (“TSPs”) would be immaterial, since PSTN calls are significantly cheaper today than in 1999 when OSP registration was introduced. Another stakeholder suggested that requirement of collection of statistical information can be fulfilled through an intimation mechanism and not necessarily the registration process.
  • Many stakeholders were in favour of continuing OSP registration. However, they argued that the process should be simplified and made less cumbersome. For this, they suggested:

(a)   paperless registration process;

(b)   saral sanchar portal should be made user-friendly and comprehensive for registration purposes;

(c)   entity-based registration, i.e. an entity should not be mandated to obtain multiple registrations for multiple OSP centres. In case of additional OSP centres by the same entity, only an intimation to the Licensed Service Area field units/TERM Cells (“LSA Units”) should suffice;

(d)   expedited registration process since operations cannot commence without valid registration;

(e)   uniformity in registration process by ensuring a single checklist of documents adopted by every LSA Unit; and

(f)    FAQs to be uploaded on DoT’s website clarifying common problems faced by OSPs.

  • The role of LSA Units was also highlighted. Stakeholders expressed their concern over varied interpretations adopted by different LSA Units which leads to ambiguity over the scope and application of OSP terms and conditions.
  • Stakeholders were divided about whether logical partitioning between PSTN and IP network should be discontinued. Those in favour argued that since toll bypass and subsequent revenue loss for TSPs is no longer a concern, such restriction should be removed. Further, with technological advancement, PSTN traffic is shifting towards IP-based communication which also negates the requirement of separation of networks. Others contended that since interconnection between PSTN and IP network is not permitted under the unified license, this restriction should also apply to OSPs that employ telecom resources for their activities.

The OHD concluded with TRAI officials asking stakeholders to submit additional comments, if any, within 7 days from July 15, 2019. Once all comments are received, TRAI shall release its recommendations. We hope that these forthcoming recommendations shed light on the scope of “Application Services,” especially for entities creating network infrastructure solely for their internal/captive consumption and removal of restrictions like logical partitioning and interconnection.

By:

Resham Jain