A big telecom booster for the Indian BPO sector

The Indian BPO/ITeS sector has long been the flag-bearer of liberalisation and the great pride of the nation and is rated one of the best in the world. India is the leading sourcing destination across the world, accounting for approximately 55 percent market share of the USD 250 billion global services sourcing business in 2019-20.

Today, India’s BPM industry alone stands at USD 37.6 billion i.e., INR 2.8 lakh crores (approx.) and has further potential for growth up to USD 55.5 billion i.e., INR 3.9 lakh crores by 2025.

The availability of a rich resource pool, coupled with inherent technical knowhow and understanding, have, of course, helped greatly to position India as the top outsourcing destination in the world. However, there is no room for complacency as strong competition is revving up from nations like China, Malaysia, Philippines, Brazil and Mexico. We need to urgently work for achieving continuous improvement in our performance to retain our premier position.  

What is probably not well-known is the fact that telecom constitutes the crucial backbone of the BPO sector, and the quality of this resource is most critical for its success. In the context of the above situation, the recent action of the Department of Telecommunications in significantly improving the ease of doing business in this sector through the elimination of onerous and unnecessary processes in the revised OSP guidelines issued in June 2021, is most praiseworthy.

Most would be unaware of the meaning of the telecom term OSP, the abbreviation for Other Service Provider, which is the telecom categorization of BPOs.  Firms providing tele-banking, tele-medicine and tele-trading services are also covered under the ambit of these new rules.

The June 2021 DoT guidelines are based on the TRAI recommendations for Review of Terms and Conditions of OSPs issued in September 2020. Some of the recommendations that have been accepted include:

• Dispensing off with the requirement of a VPN for remote agents;
• Permit agents to connect to central EPABX by permitting shared PBXs; and
• Permitting interconnection between data and voice paths for internal communications within the Closed User Group of the OSP/company.

It would be remembered that the government had already taken a big step forward last year toward the emancipation of the OSP sector through introduction of a very liberal Work from Home policy. The latest OSP guidelines of June 2021 is truly another colossal stride forward to full liberation and, in one stroke, facilitates a significant reduction in both CapEx and OpEx, apart from easing the conduct of doing business. Undoubtedly, this would enhance the global competitiveness of the Indian BPO sector and is likely to attract huge investments.

While the world is fast moving toward the convergence of its public networks with voice and data capabilities, from 3G to 4G to 5G, the enterprise market has long been developing and utilizing IP based PBXs (as against the earlier EPABX or electronic private automatic branch exchange) which have evolved into server based virtual machine software systems, which allow logical partitioning and a plethora of features specially tuned to the needs of the burgeoning BPO/call centre business.

The current guidelines also dispense with the requirement of a VPN for agents who could be remotely located as approved in 2020, permit agents to connect to the customers’ PBX removing one hop, allowing shared PBXs between OSP centre operations and general office use, allowing the same PBX to communicate both data and voice with all sister organisations, and allowing the central PBX to be located overseas – all these steps reduce the cost of duplicating equipment.

Earlier, a dedicated PBX was required for OSP operations and a separate PBX was required for all traditional office operations. This required space for two systems as they could not even be housed together. Special STP (Software Technology Park) or EPZ (Export Promotion Zone) spaces were permitted especially for those BPOs with overseas operations and no equipment could move in or out of the demarcated space within the building. Considerable effort would go in STP/EPZ registration in order to purchase expensive equipment under deemed export licenses to save customs duty.

Today, with the new guidelines, an Industrial or high-powered server with virtual machine software specially designed for call centres allows software enabled systems to be partitioned into multiple systems within the same server, servicing the requirements of different office functions without overlap or with overlap for higher class of service users.

All this reduces costs on equipment (hardware and software), maintenance, space/realty, manpower, as well as the costs on various administrative expenses necessary for the regulatory procedures required just for setting up the OSP centre and ensuring that these measures are complied to.

All credit goes to the government for engaging and consulting with the concerned stakeholders in relevant forums and deliberating on the need or lack thereof for regulations, considering the technologies involved, the advancement and evolution of the global technological best practices and requirements in this vertical, and progressively liberalising a vital sector which has established itself as a massive revenue earner for India. This truly reflects India’s forward-looking stance for the industry, in keeping with the credo of maximum governance and minimum government.

The Indian government has done well in giving our BPO golden goose the wings of freedom to soar and take us closer or to the USD 5 trillion target for our economy.