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Information on Unified ISP License in India – Important Terms

Important definitions.

  1. One-time Entry Fee for authorization of each service and service area is payable before signing of license agreement and thereafter, every time you apply for additional authorization(License for another SSA) . For instance,if you’re already a Class C ISP licence holder of one area, you will have to pay the one-time entry fee if you want the ISP license for another area.
    Though, the total amount of Entry Fee shall be subject to a maximum of Rs. 15 Crore.
  2. Annual License Fee is charged as a percentage of Adjusted Gross Revenue (“AGR”) to be paid by ISP License holder for each authorized service area separately.
    As of 28.03.2016, the License Fee is at 8% of the AGR, inclusive of a USO Levy which is presently at 5% of AGR.
  3. Multiple Authorizations: The Government of India has now come up with one license for any Telecom related service known as a Unified License. Under unified license, the license holders can apply for authorization in different areas. Here are a few key terms and conditions of a Unified License (UL) – 
  • One company can have only one unified license, but can apply for authorization for more than one service and service area. The tenure of such authorization will run concurrently with the UL., which means that all authorizations will be valid only till the validity of the unified license, which is 20 years as of 2016.
  • If a C class ISP license holder wants authorization in more than 4 areas in a Telecom Circle / Major State, then he automatically requires a Class B license.
  • Any applicant applying for additional authorization has to meet minimum cumulative net worth for such authorization.
  • The maximum combined net worth and paid-up equity requirement under Unified License is 25 Crore. Net-worth shall have meaning as defined under the Companies Act 2013. It does NOT include net worth of promoters / equity shareholders. While counting net worth foreign currency shall be converted to Indian Rupees at the prevalent rate indicate by RBI as on the date of the application.
  • Paid up equity capital must be maintained during the validity of the ISP License.

Important terms of ISP License/Authorization:

  1. The License is non-exclusive. Therefore, there can be numerous ISP license holders in your particular area.
  2. The Unified license is issued for a period of 20 years. It can be renewed by Licensor by 10 years if a request is made by Licensee in 19th year of license period, subject to DOT approval & guidelines. In such a case, the license holder will have to pay a renewal fee.
  3. If a Unified license holder applies for authorization in a different area, the tenure of the 2nd authorized area will run concurrently with the tenure of the Unified license. For eg. If you get your Unified license in 2012 and you get your 2nd area authorization in 2016, the tenure of the 2nd authorization will end with the tenure of the Unified license, i.e., the year 2032.
  4. Needless to say, the government may amend guidelines, terms and conditions from time to time.
  5. Total composite foreign holding of applicant shall be governed by the latest FDI policy of the government.

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