Context: The government last week announced simplified guidelines for the BPO industry and IT-enabled services. The registration requirement for other service providers (OSPs) has been done away with altogether. The BPO industry engaged in data-related work is now out of the ambit of OSP regulations. The Ministry of Communications announced the simplified guidelines for business process outsourcing (BPO) and IT-enabled services (ITES) players to reduce the compliance burden for the industry. OSPs are entities providing applications, IT-enabled or any kind of outsourcing services using telecom resources. The term refers to BPOs, KPOs, ITES, call centres, among others.  The new rules will create a friendly-regime for work from home and work from anywhere, while removing several reporting and other obligations for such companies. It is aimed at providing a strong impetus to the industry and positioning India as one of the most competitive IT jurisdictions in the world. 
What are Other Service Providers (OSP)?

• 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.

Registration of OSPs

• 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.
• Since most of these firms used leased telephone lines, this in turn used the telecom spectrum auctioned by the DoT, hence facing the regulation.
• 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.

Significance of the new guidelines

• The guidelines 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.
• 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.
• 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.

Road Ahead

• There was a need to change the regulation to give OSPs flexibilities especially after the impact of SARS COVID-2. It is a liberation and exponential reform. A policy which is abreast with the time, which will ensure India is on par with other others around the world. Cost will come down as a result of this reform and more jobs will be created especially in non-urban centers and we will see uniform growth across the country. With this reform we crossed a major hurdle what we need going forward is to bring about a few more reforms and improve the ecosystem as a whole.