ISP Consultancy

What’s the difference between VNO license and ISP license?

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 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.
  • No bank guarantees to be submitted.
Bank guarantees are to be submitted.
  • You cannot provide ISP franchise to local service providers
You can provide ISP franchise to other operators in your area of jurisdiction.
  • You cannot buy bandwidth from Multiple ISPs. You will have to stick to one ISP at a time.
You can buy bandwidth from multiple ISPs simultaneously.

 

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How to apply / get an ISP license in India?

In this article we explain how to (apply for &) get an ISP license 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 ISP license for different areas. One must acquire a Unified License under which he will obtain Authorization for providing ISP services for a certain area. Hence, it must be understood that there is no separate 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 multiple ISP authorizations of different 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.

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Step 1: How to (apply for &) get an ISP license in India? – Check Eligibility

To obtain an ISP license, you require a registered company under the Companies Act, 1956. 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 an ISP license in India? – Choose a suitable ISP license category to apply under

The next step to obtaining an ISP license is to know / decide which category of license you require – category A, B or C. Click here to know more about how to select the right category for your ISP License.

In India, there are 3 different categories of licenses to become an internet service provider, depending upon the City/State/Town/District/Village you want to start your ISP business in.

The 3 categories of ISP licenses are:

  1. Class A (National Area)
  2. Class B (Telecom Circle/Metro Area)
  3. Class C (Secondary Switching Area)

Naturally, a Class A ISP license would be quite expensive, followed by Class B & C respectively.


Step 3: How to (apply for &) get an ISP license in India? – Budgeting and Costing

To promote internet access in smaller towns, cities & villages, 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 30 Lakh 2 Crores 10 Lakh 50 Thousand
2,40,50,000
ISP “B” (Telecom circle/Metro Area) Nil Nil 2 Lakh 10 Lakh 1 Lakh 15 Thousand
13,15,000
ISP “C” (SSA) Nil Nil 20 Thousand 50 Thousand 10 Thousand 10 Thousand 90,000

As you can see above, the total capital required for a Class C license is INR 90,000/- whereas for a Class A license is as high as 2 ½ crores.

Thus, in order to become a Class C ISP licence holder, you don’t require more than Rs. 3-4 lakhs, 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 an ISP license in India? – Initial Application Process

  1. After you have chosen your ISP license category, you will need to fill out an application form.
  2. 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.
  3. Provide all required official documents. Click here to know the list of documents required.

Step 5: How to (apply for &) get an ISP 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 an ISP license in India? – Letter of Intent

If there are no issues with your application form for obtaining the ISP authorization under the Unified License, the DOT will issue a ‘Letter of Intent’ in your favor. Once the Letter of Intent is issued,  

  1. You will have to submit the one-time entry fee (as mentioned in the table above) along with the required bank guarantees.The total of both for Category A is 2.4 crores, for category B is 13 lakh & for category C is 80,000/-.
  2. 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.
  3. 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 an ISP license in India? – Confirmation

If everything goes smoothly, you will be issued an ISP authorization under the Unified License for a period of 20 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 an ISP license in India? Conclusion – Need for Expertise: Get/Apply an ISP license in India

The process of ISP 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.  

Click here to know more about our ISP consultancy.

Disclaimer: the rules keep changing as per notifications by DOT and Govt. This information was published on Oct’2016. Do not treat this as professional advice, kindly contact us for up-to-date compliance and to avail professional assistance for your application.


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