In recent years, India has witnessed an exponential growth in internet usage, making it one of the world’s largest digital markets. With an ever-increasing demand for internet services, the need for Internet Service Providers (ISPs) has become more pronounced than ever before. If you are interested in venturing into the thriving Indian telecommunications industry and wish to become an ISP, this article will serve as a concise guide to help you understand the process of obtaining an ISP license in India. Below, we will show you a video to introduce you to this article.
Categories of ISP License
In India, the Department of Telecommunications (DoT) issues ISP licenses under three categories: Class A, Class B, and Class C. Each category corresponds to different geographical coverage areas and specific requirements:
Class A ISP License: This license allows an ISP to provide internet services in a specified metro area or a major city. The minimum paid-up capital requirement for a Class A license is typically higher than that of the other categories.
Class B ISP License: With a Class B license, an ISP can operate in a telecom circle, which includes multiple districts and towns within a state. The capital investment required for a Class B license is relatively lower than that of a Class A license.
Class C ISP License: This license grants the ISP the ability to provide internet services in specific rural areas or small towns. The capital investment required for a Class C license is generally the lowest among the three categories.
ISP License or VNO (Virtual Network Operator)
Aside from obtaining a traditional ISP license, you also have the option of becoming a Virtual Network Operator (VNO). VNOs do not own the underlying network infrastructure but lease bandwidth and network services from existing licensed ISPs or telecom companies to provide internet services to end-users.
Choosing between an ISP license and a VNO license depends on various factors, including your budget, business model, and the extent of control you want over the network infrastructure. While a VNO license might involve less upfront investment, acquiring an ISP license can provide more control and independence in shaping your services.
Private Limited Company: A Must
Irrespective of the category of the license you wish to apply for, it is essential to set up a Private Limited Company as per the Companies Act, 2013. The company will be the legal entity through which you can apply for the ISP license. This requirement ensures that you have a well-defined corporate structure, liability protection, and a credible business presence.
Conclusion
Obtaining an ISP license in India is an intricate yet rewarding process that opens the doors to a lucrative market with millions of potential customers. Before embarking on this journey, carefully assess the geographical area you wish to cover and the scale of operations you want to achieve. Decide on the type of license that aligns best with your business goals – Class A, Class B, or Class C. Additionally, consider the option of becoming a VNO if you prefer a less capital-intensive approach.
Remember, establishing a Private Limited Company is a prerequisite, and it will serve as the foundation of your ISP venture. By adhering to the regulations, fulfilling the financial requirements, and ensuring compliance with all legal aspects, you can successfully secure an ISP license and pave the way for a prosperous internet service business in India.
Below this video, we will enclose a written summary of the documents required.
What documents are needed to get an ISP license in India?
Generally, the application procedure for an ISP license is consistent across all states in India. The primary documents required for obtaining an ISP license typically include:
While the basic set of documents remains the same, there may be minor variations or additional requirements in specific states based on local regulations or administrative procedures. It’s crucial to thoroughly research the licensing process in the state where you intend to establish your ISP and ensure compliance with all applicable rules and guidelines.
To avoid any potential discrepancies, it is strongly recommended to contact the Department of Telecommunications or consult with a legal professional with expertise in telecommunications regulations in India to get accurate and up-to-date information on obtaining an ISP license.
Getting A VNO License In India: The Ultimate Guide
VNO license is a telecom service provider with a license to provide telecom services solely for transit over the facilities of another service provider. In India, VNO licensing is regulated by the Department of Telecom, who grants these licenses based on guidelines set by the Central Government of India.
What is a VNO?
A Virtual Network Operator (VNO) is a type of telecommunications company that provides voice and data services over a secure, private network. VNOs typically lease space on a carrier’s network and then resell it to their customers. In some cases, VNOs may also own and operate their own networks.
VNOs are similar to Mobile Virtual Network Operators (MVNOs), in that they both provide service without owning the underlying infrastructure. However, there are some key differences between the two. For one, VNOs focus on providing businesses with secure, private networks, while MVNOs cater to individual consumers. Additionally, VNOs typically have more control over the quality of their service since they own and operate their own networks.
The Indian telecom market is one of the most competitive in the world, with nearly 1.3 billion subscribers as of 2017. In order to get a slice of this pie, companies need to have a presence in India. And for many foreign companies, the best way to do this is by setting up a VNO.
Not only does this allow them to tap into India’s huge market potential, and provide internet for rural areas in India, but it also gives them the flexibility to tailor their services specifically for the Indian market. Setting up a VNO in India can be a complex process, however, so it’s important to know all the ins and outs before getting started.
This guide will give you an overview of everything you need to know
How To Get A VNO License In India?
In India, a VNO license is granted by the Department of Telecom (DoT). The process of getting a VNO license in India is as follows:
1. Submit an application to the DoT along with the required documents.
2. After the application is received, it will be forwarded to the concerned authority for scrutiny.
3. If the application is found to be in order, a provisional registration certificate (PRC) will be issued.
4. The applicant then needs to obtain a surety bond and furnish it to the DoT.
5. Once the surety bond is furnished, the applicant will be issued a formal license.
Process To Apply And Get Approved
The process of getting a VNO license in India is not as difficult as it may seem. There are a few simple steps that need to be followed in order to get your application approved.
1) Firstly, you will need to submit an application form to the concerned authorities. Along with the form, you will also need to submit supporting documents like your company’s incorporation certificate and ISP business plan in India.
2) Once your application is received, it will be reviewed by the authorities. If they have any queries, they will get in touch with you.
3) After your application is cleared, you will be asked to pay the license fee. Once the fee is paid, your license will be processed and issued.
4) You will then need to obtain a Certificate of Registration from the Registrar of Companies. This certificate needs to be renewed every year.
5) Finally, you will need to comply with all the rules and regulations set by the Telecom Regulatory Authority of India (TRAI).
Conclusion
With the right information and preparation, getting a VNO license in India can be a relatively simple process. We hope that this guide has provided you with all of the information you need to get started on your application. If you have any additional questions, feel free to reach out to us and we’ll be happy to help. Good luck!
Need an ISP consultant to help you with your ISP License Application? Click here
In this article we provide information on types of VNO License categories in India for running ISP business.
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 either acquire a Unified License under which he will obtain ISP Authorization for providing ISP services or VNO Authorization. To know the difference between the two, click here.
One company can hold only one Unified License, but can apply for ISP / VNO 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 VNO license authorizations under the Unified License to become an internet service provider and set up an ISP franchise in India, depending upon scale or the City/State/Town/District/Village you want to start your ISP business in.
The 3 categories are differentiated by the scale of the territory/coverage area of the VNO 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 VNO License Categories in India are:
Class A (National Area) – This license is for Pan India operations.
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 see the list of secondary switching areas in India, click here.
Naturally, a Class A VNO license would be quite expensive, followed by Class B & C respectively.
We understand that there is quite some confusion among ISPs regarding which license should they opt for.
An ISP can carry out their ISP business as per their ISP business plan in India using either of the 2 licenses, but to ensure which license exactly suits you, refer to the table below to understand the major differences between VNO license and ISP license –
VNO License
ISP License
Issued for a duration of 10 years.
Issued for a duration of 20 years.
The license terms can be reviewed in every 4 years by DoT.
Once issued, the license will be valid for 20 years no matter the changes in DoT policies.
Lesser bank guarantees to be submitted.
More bank guarantees are to be submitted.
You cannot provide ISP franchise to local service providers
A VNO (Virtual Network Operator) License is a smaller subset of the ISP license. ISPs who wish to do ISP business only in a particular district or state can opt for a VNO license instead of an ISP license due to the cost effectiveness of VNO compared to an ISP license.
To know the differences between ISP and VNO license, click here.
Step 1: How to (apply for &) get a VNO license in India? – Check Eligibility
To obtain a VNO license, you require a registered company under the Companies Act, 1956, preferably, a Pvt. Ltd. Company. The chances of rejection are approvals are low in case of a Pvt., Ltd. Company as against a sole proprietorship/partnership firm . You can log on to the Registrar of Companies’ website for more information on how to register a company if you haven’t already registered yours.
Step 2: How to (apply for &) get a VNO license in India? – Choose a suitable VNOlicense category(Add link) to apply under.
In India, there are 3 different categories of VNO licenses to become an internet service provider, depending upon the City/State/Town/District/Village you want to start your ISP business and set up ISP franchise in India.
The 3 categories of VNO licenses are:
Class A (National Area)
Class B (Telecom Circle/Metro Area)
Class C (Secondary Switching Area)
Naturally, a Class A VNO license would be quite expensive, followed by Class B & C respectively.
Step 3: How to (apply for &) get a VNO license in India? – Budgeting and Costing
To promote internet access in smaller towns, cities & to provide internet for rural areas in India, the Government of India has made a conscious effort to ease prices of a Class C license compared to a Class A or B license.
The following table will explain the financial entry conditions you require to fulfill in order to obtain a Class A/B/C ISP license:
Service
Minimum Equity
Minimum Net worth
Entry Fee (Rs.)
Performance BG (Rs.)
Financial BG (Rs.)
Application Processing Fee (Rs.)
Total Capital Required (Rs.)
ISP “A” (National Area)
Nil
Nil
15 Lakh
Nil
10,000
50 Thousand
15,60,000
ISP “B” (Telecom circle/Metro Area)
Nil
Nil
1 Lakh
Nil
10,000
15 Thousand
1,25,000
ISP “C” (SSA)
Nil
Nil
10 Thousand
Nil
1,000
10 Thousand
21,000
As you can see above, the total capital required for a Class C VNO license is INR 21,000/- whereas for a Class A license is as high as 15.6 lac.
Thus, in order to become a Class C VNO licence holder, you don’t require more than Rs. 50,000, depending on the lawyer / ISP consultant fees.
Once you have selected the category of the ISP license you want to obtain, it is important to know how the entire application process goes.
Now, let’s take you through on how to apply for an ISP license & the documents, legal help, etc. you will require.
Step 4: How to (apply for &) get a VNO license in India? – Initial Application Process
After you have chosen your VNO license category, you will need to fill out an application form.
Along with the form, a non-refundable Processing Fee of INR 15,000/- must be paid by the applicant, along with 2 copies of the application form, by DD/Pay Order from a Schedule Bank payable at New Delhi issued in the name of Pay & Accounts Officer (Headquarter) DOT.
Step 5: How to (apply for &) get a VNO license in India? – Document Review
Once you have submitted your application form along with the required documents & fees, the Department of Telecom will review your application & respond to you, the applicant, in under 60 days, as far as practicable i.e. in case there are any issues with your application, there may be a delay in the issuing of a response from the DOT.
If there is no problem with your complete application, the DOT will issue a ‘Letter of Intent’ in your favor.
However, there are chances that your application may be rejected or delayed due to non-compliance with legal, security, hardware, commercial and contractual compliance and human errors such as incomplete form submission.
Therefore, it is important to get an ISP consultant / lawyer to review your application before you submit your application form for obtaining the ISP authorization under the Unified License . Click here to know more.
Step 6: How to (apply for &) get a VNO license in India? – Letter of Intent
If there are no issues with your application form for obtaining the VNO license under the Unified License, the DOT will issue a ‘Letter of Intent’ in your favor. Once the Letter of Intent is issued,
You will have to submit the one-time entry fee (as mentioned in the table above) Furthermore, you will have to submit a signed license agreement with the DOT and any other documents required, including the documents mentioned in the Letter of Intent.
Do note that the one-time entry fee is non-refundable & once the Letter of intent is issued, all the above requirements have to be fulfilled within a specific period that will be mentioned in the Letter of Intent.
Step 7: How to (apply for &) get a VNO license in India? – Confirmation
If everything goes smoothly, you will be issued a VNO License for ISP under the Unified License for a period of 10 years. The DOT will contact you / mail you directly to inform you whether you have been issued the ISP License.
Step 8: How to (apply for &) get a VNO license in India? Conclusion – Need for Expertise: Get/Apply a VNO license in India
The process of VNO licensing is technical and lengthy for a common person to comprehend. There have been quite a few instances where the application is rejected because of an incomplete submission, missing information, non-compliance, missing documents etc. Thus, it is advisable to get your documents & forms reviewed by a professional ISP consultant or lawyer to make sure you don’t lose out on time & money.
Disclaimer: the rules keep changing as per notifications by DOT and Govt. This information was published on Sept’2017. Do not treat this as professional advice, kindly contact us for up-to-date compliance and to avail professional assistance for your application.
Need an ISP consultant to help you with your ISP License Application? Click here
