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Considerations for voice services to and from India
Outsourcing 8th Jul 2014 Dinesh Bhalla

This blog discusses considerations around issues related to communications in India that are regulated by legislation, and as such it is extremely important that proper legal advice is taken as part of any procurement process to ensure compliance with the law.

Regulatory environment

Telecoms services and I.T. are controlled by two main acts of the India Parliament:

  • Indian Telegraph Act 1885 (yes, 1885!) and
  • I.T. Technology Act 2000

Both acts, not surprisingly, have been updated by various amendments after becoming law. However, the fact that the Telegraph act 1885 (with its amendments) has not been repealed and a consolidated Act put in its place means that interpretation to ensure full compliance is complicated – hence the need to ensure proper legal advice is sought.

There are two main bodies responsible for regulating the industry, and a third which ensures disputes are settled between the regulatory bodies and licensees.

Under the Telecoms act the central government of India has exclusive rights to issue licenses to operators. This is done through the Department of Telecommunications (DOT), which is the licensor. It also formulates and enforces policies, allocates and administers resources (e.g. spectrum and number allocations) and generally coordinates matters in relation to telecommunication services in India. Another role of the DOT is to ensure standardization, and promote private investment in the telecoms market in India.

Another body, the Telecoms Regulatory Authority of India (TRAI) is an independent body that is able to make recommendations on a request from the DOT or on its own volition on matters relating to the telecoms sector. The TRAI is able to issue regulations on interconnection, quality of service and revisions of tariffs.

For completeness the third body mentioned is the Telecoms Dispute Settlement Appellate Tribunal (TDSAT), this has been set up to adjudicate on disputes between the DOT and licensees.

The DOT is the main body to be consulted to get approval for voice services including Contact Centres and data communications.

The Department of Electronics and I.T. (DEITY) is the main body responsible for I.T. matters, including certain regulations under the I.T. Act 2000 and its amendments e.g. encryption etc. For a fuller list of its functions follow the link below:


Both departments are part of the Ministry of Communications and Information Technology; this ministry also contains the Post Office of India.

Regulation in practice

As far as voice services (including Contact Centres) is concerned, approval by DOT must be obtained before setting up any service. They need to ensure that for standard data or voice connections the rules are being followed.

For Voice Over IP (VOIP) only licensed Internet Service Providers (ISPs) are permitted to provide Internet telephony in a particular service area. The connections are significant i.e. PC-to-PC is allowed, PC to a telephone outside India is allowed, but PC or IP phone to a PSTN/ISDN connection in India is not allowed.

For companies employing their own network services to provide BPO or offshore development Centres (ODCs) in India the concept of the closed user group (CUG) is employed - that is, staff external to India are able to speak to their colleagues over their Internal phone service but are not allowed to connect via that network to the PSTN in India. An international call would need to be made for that.

To set up a contact centre in India the company must first apply for an Other Service Provider (OSP) license, “other” in this case meaning not a telecoms communications line provider or a mobile operator. The application process is carried out online using the following link to the DOT portal:


As part of the approval for an International company to set up a contact centre in India the following rules apply (as always, please check the latest situation).

1. All companies seeking to set up contact centres must register with the DOT under the category of OSP as defined in National Telecom Policy, 1999.

2. Contact centres can obtain resources from any licensed service provider or they can obtain international private leased circuits (IPLC) from international long distance operators.

3. The licensed service providers must examine the network diagram and grant resources to OSPs as per the terms and conditions of their letter of approval, and the prevailing guidelines and policy. Both the service provider and the OSP will be held responsible for any violation of these guidelines with regard to the use of resources.

4. Interconnection of contact centres within the same group of companies is permitted for redundancy, back-up and load balancing, subject to the DOT’s prior written approval.

5. If changes are required to the site’s infrastruture e.g. a change to the number of seats or a need for extra bandwidth, the DOT will need to be notified within 15 days. If however the change invloves a move to a new location then approval from the DOT will be required prior to migrations.

6. The DOT has the right carry out periodic audits of the contact centre.

Specific Guidelines applicable to International Contact Centres

1. 100% foreign direct investment is permitted in Indian contact centres, i.e., a foreign company can invest up to 100% in the equity of an Indian contact centre.

2.Interconnectivity of international and domestic contact centres is not permitted, as it will bypass the local operators in India.

3. No PSTN connectivity is permitted at the Indian end. However, both inbound and outbound calls are permitted.

4. Interconnectivity with “hot sites” is permitted for the purpose of back-up and working during a disaster at the international contact centre location. For this purpose, the international contact centre operators must provide the following:

a) A dedicated server or router at the hot site pertaining to the international contact centre.

b) Local leased lines from the international contact centre to the respective servers dedicated for the international contact centre at the hot site.

c) A local leased line from the hot site to the IPLC provider.

Hot sites can be used by the International Contact Centre connected to it, only at the time of a disaster, by requesting the IPLC provider to switch its IPLC towards hot sites. The DOT must be informed about the use of hot sites.

5. For foreign end connectivity, an International Contact Centre may use ATM / MPLS / Frame Relay based Managed International Networks in addition to the existing connectivity through point to point IPLC.

There are also regulations regarding the encryption used by companies when using service provider networks which will be the subject of a future blog. This needs more discussion because the laws around this are not consistent and in some cases confusing.

I hope this provides some insights and emphasises the need to ensure proper due diligence is taken when procuring services from India - and the need to make sure that any procurement process involving offshore services covers these areas. 

If you need professional support we’d be delighted to guide you through the process. Please contact me at Ofsure or email dinesh.bhalla@ofsure.com.


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