NEW DELHI: The few seconds of music you hear while waiting for someone to answer a phone call is copyrighted intellectual property, and telecom operators offering caller tunes may now need separate licences and royalty payments to lyricists and composers after a recent Calcutta High Court ruling.
On 8 May, the Calcutta High Court ruled against Vodafone Idea in its long-running dispute with the Indian Performing Right Society (IPRS), holding that telecom operators cannot offer caller tunes and ringtones solely on the basis of licences obtained from music labels.
Mint explains the ruling and what it could mean for telecom operators and digital platforms.
What is the case about?
The dispute centres on whether telecom operators offering caller tunes and ringtones require separate licences from lyricists and composers, apart from licences obtained from music labels such as Saregama.
Telecom companies treat caller tunes as a value-added service, a paid add-on beyond regular calling and SMS facilities that generates additional revenue and improves user engagement.
Vodafone Idea signed agreements with Saregama in 2014 to use songs for caller tune services. However, IPRS argued that while music labels may own sound recordings, lyricists and composers retain separate rights over the underlying literary and musical works under the Copyright Act, particularly after the 2012 amendments that strengthened creators’ royalty rights.
In 2018, Vodafone Idea approached the Calcutta High Court challenging IPRS’s claim that telecom operators required separate licences and royalty payments for using songs as caller tunes and ringtones. Saregama separately sued Vodafone over the use of copyrighted sound recordings in its value-added services.
Vodafone Idea and Saregama settled their dispute in 2019, with Saregama withdrawing its case and Vodafone agreeing to clear dues for using sound recordings. IPRS, however, continued pursuing royalty claims, arguing that telecom operators still needed separate licences from lyricists and composers for caller tune services.
How does IPRS work?
IPRS is a copyright society representing lyricists, composers and music publishers in India. It is registered under the Copyright Act, 1957, and is authorized to issue licences, collect royalties and distribute payments to creators for commercial use of musical and literary works such as songs, lyrics and compositions.
IPRS licenses music across telecom caller tunes, OTT platforms, radio, television, concerts and public performances. Royalties collected are distributed among members after administrative deductions.
It currently operates under the leadership of lyricist and screenwriter Javed Akhtar.
What did the high court rule?
The Calcutta High Court ruled that telecom companies cannot offer caller tunes and ringtones solely on the basis of licences obtained from music labels such as Saregama.
The court held that lyricists and composers retain independent royalty rights over the underlying literary and musical works embedded in songs, even when sound recordings are owned by music labels.
The division bench observed that the amended Copyright Act “recognized the right of the author of literary and musical work in a sound recording to receive royalties” when such recordings are commercially exploited.
It also held that ownership of a sound recording does not extinguish the rights of creators behind the song. It ruled that Vodafone Idea required separate authorization from IPRS, which represents lyricists and composers, for using songs through caller tunes and ringtones.
Importantly, the court said Saregama “does not have any legal authority or competence to grant licence” for the underlying literary and musical works embedded in songs, and Vodafone Idea “does not have licence to commercially exploit” those works “without express permission from IPRS.”
What does the ruling mean for telecom and digital platforms?
Lawyers say the ruling could reshape India’s digital music licensing landscape by ending reliance solely on music label licences and adding fresh licensing, compliance and royalty obligations for telecom operators and digital platforms.
According to the order, IPRS claimed ₹18 crore from Vodafone Idea for alleged unauthorized use of copyrighted songs in caller tune and ringtone services for the period till 31 March 2019.
Vodafone Idea deposited at least ₹6 crore during the litigation in court, including ₹3.5 crore under the 1 October 2018 order and ₹2.5 crore under the 12 October 2018 order.
According to Soumya Ray Chowdhury, advocate at the Calcutta High Court who appeared on behalf of IPRS, Vodafone Idea will now have to comply with the ruling and IPRS is expected to receive the amounts deposited before the court.
Chowdhury added that Bharti Airtel has already secured licences from IPRS for caller tune and ringtone services. “This was long overdue. It is a huge victory for more than 26,000 authors and composers who are members of IPRS.”
“The Calcutta High Court’s ruling marks an inflection point that effectively ends the era of single-window licensing for digital music in India. By confirming that music labels cannot authorize the use of underlying lyrics and melodies, the Court has placed a statutory veto in the hands of authors and composers through IPRS,” said Ankita Singh, founder of Sarvaank Associates.
Singh added that for telecom operators, “a sound recording licence is no longer a complete shield,” and every caller tune and ringback tone service will now require a dual-licensing framework to avoid infringement risks and back-dated royalty claims.
Legal experts said the implications may extend beyond telecom operators to streaming services, OTT platforms, short-video applications and digital platforms that use copyrighted music commercially.
“Telecom operators and digital platforms should immediately review their existing licensing structures, undertake comprehensive copyright and rights-clearance audits, obtain appropriate licences from copyright societies wherever necessary, and strengthen compliance and royalty accounting mechanisms,” said Himanshu Deora, Partner at King Stubb & Kasiva, Advocates and Attorneys.
How much royalty do telecom operators need to pay?
The financial implications could be significant for telecom operators with large caller tune subscriber bases.
Under the IPRS tariff scheme published on its website, telecom operators offering caller tunes and ringtones are required to pay royalties for commercially using songs.
Telecom companies must pay 8% of the end-user price for real or true tone services and 15% for monophonic and polyphonic ringtones. For Caller Ring Back Tone services, royalties are calculated based on subscriber numbers and gross revenue from subscriptions and song selections, with minimum per-user monthly royalty rates ranging from ₹1 to ₹1.50 depending on the subscriber base.