In this article we provide Information on documents required for ISP License Application in India – Stage 1 & 2
Stage 1 – Documents required for ISP License Application in India
PROCESS A: Company related documents
A certified copy of the Certificate of Incorporation of the company issued by the Registrar of Companies.
A certified copy of Memorandum of Association & Article of Association highlighting the provisions which includes Internet Services under the main objects of the company.
Written consent of the company’s board regarding decision of the company toapply for a new ISP Licenseto execute anISP business plan in Indiaand details of the authorized signatory including name and designation along with the specimen signature. This disclosure has to be signed & stamped by a Company Secretary.
Certified copy of Form-18 along-with the copy of challan form i.e. GAR-7 (in case registered office address is not mentioned in Certificate of incorporation or the address shown in Certificate of incorporation is different from that given in application form).
PROCESS B: Application Form – Unified License
Duly filled application form in the format given by DOT, on your company letterhead under the signature of authorized signatory. The form should be sent to ADG(LR-1), Department of Telecommunications, Room No. 1021, Sanchar Bhawan, 20, Ashoka Road, New Delhi-110117.
A list of Directors of the company with a few of their details like name, address, nationality etc. and the complete equity structure of the company has to be mentioned in the application form. This gives clarity to the Government about the foreign investment, if any, in the applicant company. This disclosure has to be signed & stamped by a Company Secretary.
A one-time non-refundable processing fee of INR 15,000/- has to be paid in the form of Demand Draft drawn in favor of “Pay & Accounts Officer (HQ), DoT” payable at New Delhi.
The DOT is extremely vigilant about empty spaces in a form. There have been numerous instances where the DOT rejects an application because of unfilled spaces. Thus, it strictly directs the applicant to not leave any item blank. If the applicant has no information to furnish in a particular item, please mention ‘No’, ‘Nil’ or ‘Not applicable’.
PROCESS C: Foreign Investment related Documents
You will require FIPB Approval if there is more than 49% composite FDI in the applicant company. A copy of FIPB Approval in the name of Applicant Company, certified by the Company Secretary has to be provided if composite FDI (direct and indirect equity) in the applicant company is more than 49%.
Stage 2 – Documents required for ISP License Application post receipt of Letter of Intent
PROCESS D: Letter of Intent
After review and examination of the application of the Licensee, the Licensor / DoT will issue a Letter of Intent in favor of the Licensee. The DoT may require such further documents as will be indicated in the Letter of Intent within a specified period of time.
After receiving the Letter of Intent, the Licensee will need to pay a one-time non-refundable entry fee, along with the performance and financial bank guarantees of the appropriate amount in the form of a Demand Draft drawn in favor of “Pay & Accounts Officer (HQ), DoT” payable at New Delhi.
Needles to say, the DoT may at any time in the future issue such notifications, laws, rules and amendments that may require the Licensee to submit additional documents while applying for the license or during the subsistence of the license.
Need an ISP consultant to help you with your ISP License Application? Click here
In this article we provide information on types of ISP License categories in India
The Government of India has come up with one license for all telecom related services, known as a Unified License. Under unified license, the license holder can apply for authorization of different services & service areas. To become an ISP, one must acquire a Unified License under which he will obtain Authorization for providing ISP services. Hence, it must be understood that there is no “ISP License” as such. Instead, one must obtain ISP Authorization under the Unified License.
One company can hold only one Unified License, but can apply for authorization of multiple services and/or service areas. However, the tenure of such authorizations will run concurrently with the tenure of the Unified License, which means that all authorizations will be valid only till the validity of the unified license.
In India, there are 3 categories of ISP license authorizations under the Unified License to become an internet service provider, depending upon scale or the City/State/Town/District/Village you want to start your ISP business in and set up your internet franchise in India.
The 3 categories are differentiated by the scale of the territory/coverage area of the ISP license i.e. whether the License is for (i) national area, (ii) major states / metro cities or (iii) other smaller cities, towns, villages and districts.
The 3 ISP License Categories in India are:
Class A (National Area) – This license is for Pan India operations.
To see a list of all Nation Area license holders in India, click here.
Class B (Telecom Circle/Metro Area) – Class B license is issued for a total of 20 major states or any of the following Metro Cities – Mumbai, New Delhi, Kolkata, Chennai.
The govt keeps issuing notifications regarding territories declared as telecom circles and metro areas from time to time.
Class C (Secondary Switching Area) – This license is for only a particular secondary switching area. A secondary switching area is a government defined territory which could comprise of several small villages, towns or even districts. A class C license holder will have access to any 1 particular SSA only, unless he applies for multiple authorizations under one unified License.
To know more about the secondary switching areas in India, click here.
Naturally, a Class A ISP license would be quite expensive, followed by Class B & C respectively. Click here to know the costs.
In this article we provide information on the opportunities and hurdles to start an ISP business in India
So you want to become an ISP or WISP in India? With this article we’re weighing the pros & cons to start an ISP business in India
As ISP competition and public demand for data increases year on year, this is surely and interesting industry to be in!
Despite having 300 million internet connections, India is still struggling with slow internet speeds and has a lot of room for improvement. India did not invest enough in improving infrastructure & information in the internet industry. Increasing user growth and better public awareness about the benefits of using the internet; India’s internet infrastructure sector is pointing towards rise in demand for data.
Let’s look at the major pros & cons to start an ISP business in India
Opportunities: To start an ISP business in India
The total number of internet connections in India increased 50% between 2014-15.
India will double its internet user base between 2014-17.
India is the 2nd largest market for smartphones, with a user base of 220 million.
Around 80% of internet connections are through mobile internet.
With mobile internet plans being as expensive as Rs.25
0/Gb, the WiFi internet service providing business is tipped to grow exponentially. (Insert government info and other companies like reliance, etc..stats here of investing and planning to set up x no. of wifi internet zones in india).
It costs just 2 paisa/MB through WiFi whereas mobile data plans charge a minimum of 25 p/MB.
Further, only 13 % of internet connections are through broadband. This shows that there is still a huge untapped growth potential in the market for broadband and wifi internet services in India.
However, with the increasing number of internet users, the number of Internet service providers have not increased proportionately, thus, proving ISPs are in shortage. This might be a prime reason why 80% of India is still offline, apart from lack of government funding & initiatives.
Recent technological upgrades in the industry have also madeit cost effective to distribute & monetize internet for ISPs
The Indian Internet Industry, valued at just 13$ billion, is expected to be in triple figures by 2020. That means an 200% increase in valuation, year on year. Those are jaw-dropping numbers for any industry.
Hurdles: NOT to start an ISP in India
With those kind of numbers, you must be wondering why there isn’t an oversupply of aspiring internet service providers already? Well, becoming an internet service provider in India and setting up an ISP franchise in India is not that easy. From numerous government regulations and inefficient licensing processes to unavailability of verified sources & prices to buy bulk bandwidth, there are a few roadblocks to become an ISP.
Let’s look at a few: –
Technical roadblocks to start an ISP business in India: – The ISP Industry is highly unorganized, making it difficult for small companies to get the correct information about equipment, costing, marketing strategies, business processes, etc.
Educational roadblocks to start an ISP business in India: – Another roadblock to set up an internet franchise in India is lack of ISP consultants in India. Moreover, there are no special courses or educational programs focusing on how to become an ISP in India. The only information available is online on various blogs or websites, but that’s not enough to start a business, is it? Without the right consultation or education, starting an ISP business is risky.
Economical roadblocks to start an ISP business in India: – Becoming an ISP requires quite a bit of capital backing. Numerous one-time cost components are associated with becoming an ISP in India, from licensing to hardware, bandwidth & setup costs. Although ISP License costs are decreasing 0ver the years, it still remains high for SMBs!
Licensing issues to start an ISP business in India: – Acquiring an ISP license involves a complicated governmental procedure. The first step involves finding the ISP license applicable to you. For instance, if your internet service area is in a small village – you may need a Class-C license. Similarly, if you wish to provide internet service in any metropolitan city in India – you may need a Class-B license. To know which ISP license you need, click here. Moreover, the application goes through several levels of approval and stringent rules & regulations, making it a tedious process. It is advisable to get some professional assistance in getting the ISP license in order to rule out any errors & delays. It will make it easier for you to go through the licensing process.
All in all, the statistics show lucrative opportunity in the Internet industry in India for many years to come, although, Government policies and processes are making it difficult to become an Internet service provider. With easing ISP licenses better processes, this might soon become easier for individual to become an ISP in India. With the right information and consultancy, one can plan his ISP business and optimize it successfully. Click here for more.
Muft Internet is an ISP consultancy firm dedicated to help aspiring, small and mid-sized Internet service providers in India overcome their technical or legal roadblocks.
Plan your own ISP/WISP business, apply for an ISP license, deploy your network or buy bulk bandwidth – our ISP consultants are here to help you grow or become an Internet service provider.
Request a callback using the form below, call us on +91 80802 40000 or email us on [email protected]; and start/grow your ISP/WISP business! [contact-form-7 404 "Not Found"]
In India, a Unified License is issued only to an Indian company, registered under the Companies’ Act, 1956.
No individual / sole proprietorship / partnership concern is eligible to obtain an ISP authorization. Licenses are issued ONLY to a registered company.
While planning to obtain a license, you should check the capital required to obtain a particular ISP license as per your ISP business plan in India. The total capital required to obtain any class ISP license is mentioned below in the table. You may choose a category depending on the amount of capital you want to invest.
Table for total capital required for obtaining an ISP License in India to set up your ISP franchise in India:
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.
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.
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 before reaching out to the internet bandwidth providers in India.
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:
The License is non-exclusive. Therefore, there can be numerous ISP license holders in your particular area.
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.
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.
Needless to say, the government may amend guidelines, terms and conditions from time to time.
Total composite foreign holding of applicant shall be governed by the latest FDI policy of the government.
Need an ISP consultant to help you with your ISP License Application? Click here
