Procedures involved in applying an ISP License

 

The Indian government has brought in a single license for every telecom related services and it is called Unified License. When it comes to Unified License, the license holder can apply for ISP license for diverse areas. You have to get a Unified License in which you will obtain authorization for offering ISP services for a particular area. So, it has to be remembered that there is no different ISP license as such. One must rather acquire ISP Authorization under the Unified License.

As for Unified License only one can be held by a single company, however, one can apply for several ISP authorizations of diverse areas. But the validity of such authorizations will be similar to that of the Unified License.

The processes involved in acquiring the ISP License in India

Eligibility criteria

To get an ISP license, you need a registered company under the Companies Act, 1956. In case you don't have one then just visit the website of registrar of companies for the same.

Select an appropriate ISP License category to apply under

After obtaining an ISP license, the person has to decide the category of license required – category A, B or C. In India, 3 separate types of licenses are needed to be an internet service provider. Also, it depends upon the City/State/Town/District/Village you want to launch your ISP business in.

The 3 categories of ISP licenses are:

Class A (National Area)

Class B (Telecom Circle/Metro Area)

Class C (Secondary Switching Area)

The Class A ISP license can be a costly affair, followed by Class B & C respectively.

Financial criteria

In a bid to popularize internet access in smaller towns, cities & villages, the Government of India has come out with an economical Class C license compared to a Class A or B.

So let us get into the financial nitty gritty of acquiring the various licenses.

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

The total capital needed for a Class C license is INR 90,000/. For Class A license the amount is INR 2.50 crores.

So, to be a Class C ISP license holder, you need something around Rs. 3-4 lakhs, subject to the lawyer / ISP consultant fees.

Upon choosing the category of the ISP license you require, it is pertinent to know the whole application process.

Initial Application Process

Post selecting the ISP license category, you have to fill an application form. Together with the form, a non-refundable Processing Fee of INR 15,000/- should be given by the applicant via DD/Pay Order from a Schedule Bank payable at New Delhi issued in the name of Pay & Accounts Officer(Headquarter) DOT. You are also required to submit the requisite documents as well:

Company related documents

An attested copy of the Certificate of Incorporation of the company issued by the Registrar of Companies.

A certified copy of Memorandum of Association and Article of Association underlining the provisions, which includes Internet Services in the chief objects of the company.

Written permission of the company’s board related to the decision of the company to apply for a new ISP License and particulars of the authorized signatory including name and designation along with the specimen signature.This disclosure needs to be signed and stamped by a Company Secretary.

Certified copy of Form-18 and the copy of challan form ie GAR-7 case registered.(If office address is not given in Certificate of incorporation or the address shown in Certificate of incorporation varies from that of in the application form).

Document pertaining to Foreign Investment

A copy of FIPB Approval in the name of Applicant Company, certified by the Company Secretary is required if the cumulative FDI (direct and indirect equity) in the applicant company is in excess of 49%.

Document Review

After this, the Department of Telecom will evaluate your application and respond to the you within 60 days. In case of any problems with your application, there might be a delay in the issuing of a response from the DOT.

If your application is perfect, then the DOT will issue a ‘Letter of Intent’ in your favor.
However, your application might be rejected or delayed as a result of dishonouring legal, security, hardware, commercial and contractual compliance, and human follies such as incomplete form submission.




Issuance of Letter of Intent

In case there are no problems in your application form to acquire the ISP authorization under the Unified License, the DOT will issue a ‘Letter of Intent’ in your favor. Once the same is given you need to give the one-time entry fee 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/-. Also, you need to give a signed license agreement with the DOT and any other documents needed, including the documents mentioned in the Letter of Intent.

The one-time entry fee is non-refundable. Further, once the Letter of Intent is issued, all the other formalities have to be performed within a specific period as prescribed in the Letter of Intent.

Affirmation

If all obligations are met, you will be given an ISP authorization under the Unified License for a period of 20 years. The DOT will either contact you through mail or directly to intimate you about the status of your ISP License.

Final thoughts

As you might have observed, the methods involved in ISP licensing is technical and lengthy for an ordinary person to execute. If these procedures are not followed properly then the application stands rejected. Hence, it is ideal for you to get your documents & forms evaluated by a professional ISP consultant to ensure you don’t face any anxiety or heartbreaks due to delay or rejection.