Is SAAS a value-added telecom service?

Software as a service (SaaS) is on the rise in the technology, media and telecommunication (TMT) industry, gradually drawing the attention of venture capital. In the SaaS business model, the service provider uniformly deploys application software on its servers and the client purchases the required application software services from the service provider and obtains the software service through the internet.

Some SaaS services put online the traditional offline customized software services, while others provide online office software services to clients through the cloud. Notwithstanding the differences among the specific types of SaaS services, they all need to be realized through the internet. Therefore, whether or not an SaaS provider is required to obtain an internet content provider (ICP) permit may need the attention of SaaS providers and investors who are interested in this sector.

Pursuant to relevant provisions of the Administrative Measures for Internet Information Services, providing information that needs to be paid for to online users through the internet requires the obtaining of an ICP permit, whereas providing public and shared information that is free of charge to online users only requires ICP filing. Therefore, whether an SaaS service provider is required to obtain an ICP permit depends on whether the SaaS service can be classified as the “provision of paid information”.

Amy Deng is a partner at PacGate Law Group