Industry
Mint Explainer: Why Trai's anti-spam measures have raised misplaced concerns over delayed OTPs
Summary
- As the regulator implements new anti-spam measures, concerns have arisen over potential delays in OTP delivery. With an estimated 1.6 billion OTPs sent daily, understanding the impact of these regulations is crucial for consumers. Mint explains what will actually happen from 11 December.
India’s telecom regulator has tightened regulations to counter spam and unsolicited messages. One measure is mandating the traceability of commercial messages from senders. This led to speculation that OTPs, or one-time passwords, could get delayed and adversely affect transactions initiated by consumers such as bank transfers and online payments.
The Telecom Regulatory Authority of India (Trai) has clarified that the issue will not arise. On Saturday, it extended the 1 December deadline to implement the measure to 11 December. Will OTPs still get affected? Mint explains.
What measures has the Telecom Regulatory Authority of India taken to curb spam messages?
In August, Trai mandated that all message trails must be traceable from 1 November 2024. This move is aimed at enhancing accountability by tracking the origin of messages. To allow for technical upgrades and declarations by principal entities (PEs) and telemarketers (TMs), Trai gave them time till 30 November.
PEs are entities that send commercial messages to telecom subscribers, and they include banks, financial institutions, insurance companies, trading companies, and businesses.
On Saturday, Trai extended this deadline to 10 December. This means that from 11 December, the traceability requirements kick in. Apart from telcos, Trai is working with central and state governments departments, and entities regulated by the Reserve Bank of India, Securities and Exchange Board of India, Pension Fund Regulatory and Development Authority and Insurance Regulatory and Development Authority of India to raise awareness.
Will traceability disrupt non-spam messages?
Trai has clarified that message traceability is not intended to disrupt non-spam messages. The primary goal is to enhance the ability to track and block spam. While there may be some initial teething issues as service providers adjust to the new regulations, Trai has assured that the mandate will not lead to delays in message delivery or disrupt the timely receipt of OTPs.
Why is there a concern over OTPs not getting delivered?
While a typical Indian consumer gets a handful of text messages or SMSs every day, she’s bound to get at least one OTP message a day. India has over 1 billion mobile phone users, which translates into at least 1 billion OTPs sent on an average every day.
OTP is required as part of two-factor authentication for safer financial transactions. The method is used for non-financial transactions as well, which means the number of OTPs sent daily could exceed 1 billion.
Telecom companies estimate the number at 1.6-1.7 billion OTPs a day.
If the entities that send OTPs or the telcos that provide the service do not adhere to Trai’s rules on message traceability, OTP delivery can get affected.
Have telcos or entities raised concerns on implementing this measure?
Telcos have said they were ready to implement tools to ensure traceability of messages.
However, some PEs and TMs have yet to register their complete chain on the distributed ledger technology platform. Messages including OTPs sent by such unregistered PEs and TMs could face delivery delays or disruption.
According to Trai data, more than 27,000 PEs have already registered their chains with telcos and further registration is in progress. Telcos have sent and continue to send warning notices to PEs and TMs that have not yet implemented the changes.
Has there been any improvement in spam call volumes after TRAI’s intervention?
TRAI said in a statement last month that the number of complaints against unregistered senders, as reported by telcos, reduced 13% to 1.63 lakh in September 2024 and 20% to 1.51 lakh in October 2024 from 1.89 lakh in August 2024. It also disconnected 275,000 phone numbers and blocked services to 50 entities as part of a crackdown against pesky callers and unregistered TMs.
According to private consumer research firm LocalCircles, which surveyed over 14,000 responses from mobile subscribers located in 309 districts of India last month, 27% confirmed a reduction in pesky calls.
