India's Do-Not-Call Law Puts Telecoms on the Hook
After Years of Discussion, Rules Take Effect Next Month Levying Fines on Telecoms When Marketers Violate List
By MEGHA BAHREE
MUMBAI—After years of debate, India plans next month to start enforcing sweeping changes to its Do Not Call rules, making the telecommunications industry responsible for walling off the sea of unwanted calls and text messages that have been drowning mobile-phone users.
As in most countries, including the U.S., India so far has held only telemarketing firms responsible for violating the Do Not Call list. Under the new rules, the world's No. 2 country in terms of mobile-phone users, behind China, now will levy heavy fines on telecom companies that allow calls to be made to people on the list. Telemarketers here use calls and text messages to sell an array of products and services, including apartments, sauna belts for weight loss and herbal remedies for diabetes.
The Telecom Regulatory Authority of India's National Do Not Call registry comprises about 97 million people, who enroll by telephone or text message. But under the old law, which was passed in 2007, the registry's weak penalties meant it was widely considered almost a cheat sheet for telemarketing companies on whom to call.
Despite years of discussion on strengthening the law, movement toward stricter rules only moved into high gear last year after Indian Finance Minister Pranab Mukherjee received a telemarketing call while in Parliament.
Unhappy with their new burdens under the law, telecom operators pushed back, haggling with regulators over details and delaying the law's enforcement, people in the industry said.
"For something that's very well intentioned, it's been getting stuck in nonsensical push-back," said Chirag Jain, vice president, SMS GupShup, a start-up that offers group messaging services.
The new law prompted at least one major telecom operator to scale back from providing service to telemarketers. Bharti Airtel Ltd., the largest operator in India by subscribers, no longer will provide text-messaging service to telemarketers, although it will continue to carry telemarketing phone calls, said Kunal Bajaj, India partner at Analysys Mason Ltd., a London-based telecom-consulting firm. Bharti Airtel didn't respond to requests for comment.
Mr. Bajaj predicted that other operators will follow suit. "Before, [the rules] were too lax and there was no system, and now it seems they have gone too far," he said.
Vodafone Group PLC, Idea Cellular Ltd. and Aircel Ltd., who are among India's biggest carriers, didn't respond to requests for comment.
The new rules were announced Dec. 1, yet enforcement has been delayed while officials and the industry worked out a key provision that lets subscribers know when a call or text message is from a telemarketer.
Under the provision, telemarketers' phone numbers must be preceded by the numbers "140" on caller-ID screens and commercial text messages must have standard headers that will identify them. The Telecommunications Department will issue that code this month, an official in the Telecom Regulatory Authority said. Companies will then have a month to upgrade their systems before enforcement starts, he said.
The biggest change to current law will hold carriers responsible when telemarketers contact people on the Do Not Call registry. Under the new law carriers will face a fine of $2,200 for the first offense; $11,000 for the second offense; and $22,000 for each subsequent offense.
The authority also increased the penalties on telemarketers who violate the registry, raising the fine for the first offense to $550 from $11. The maximum fine, reached at the sixth offense, will increase to $5,500 from $22. After that, the telemarketer will be barred from receiving telecom services for two years.
Under the new rules, customers will be able to distinguish between bulk messages they want and ones they don't. Such a mechanism doesn't exist in many countries and puts an additional burden on carriers.
Subscribers will be able to sign up for a Do Call list to receive calls or text messages on as many as seven topics, including entertainment, real estate and banking and insurance. Telemarketers and telecom providers will have to check both lists before sending and transmitting calls and messages.
But that process requires operators to install new hardware and software, according to the Cellular Operators Association of India, a trade group. New equipment and training will cost the industry at least $100 million, the association said.
"It's very nice [that subscribers have this flexibility of opting in], but it all comes at a cost," said the association's president, Rajan Mathews. It is difficult to set up the software and train employees to handle such complexity, he said.