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The DOT has Cancelled LOIs of 71 Virtual Network Operators

  • October 25, 2021
  • Registrationwala

It must be a ground-shattering feeling to realize that your VNO license might be forever out of your reach.

 At least, that’s what the Virtual network operators felt when the start of the beginning of autumn took away their UL VNO licenses from them.

What’s the story? Well, the Department of Telecommunication has cancelled the Letter of Intents of 71 Virtual network operators in October. This blog is will tell the primary reason behind it and will give you tips that you can follow to prevent the same from happening to you.

What is a virtual network operator?

A Virtual network operator is a cost-efficient internet service provider that buys internet bandwidth from Telecom Companies and resells them under his or her brand. Over the past few years with the rise of the telecommunication sector, becoming a Virtual Network Operator is the next best thing for anyone not possessing the financial requirements to become a standard Internet Service Provider.

However, being cost-efficient doesn’t mean that DOT is lenient towards a Virtual network Operator. The cancellation of the Letter of Intent is a testament to that.

What is a Letter of Intent?

To know about the Letter of Intent, you need to understand the procedure to obtain VNO License in India.

  1. Company incorporation happens first. It gives infrastructure to your internet business.
  2. The company then has to apply for the license to start a VNO ISP known as the VNO license. India has only recently drafted the regulations for this certification.
  3. After the application is filed, it goes through multiple levels of assessment. If there are discrepancies, the applicant has to fix them.
  4. Once the application is free from all discrepancies, DOT – the Department of Telecommunication – accepts it. In response, you obtain the Letter of Intent.

 A letter of Intent is a letter that instructs the applicant to fulfil the following requirements:

  1. Payment of Entry Fee
  2. Deposit of Financial Bank Guarantee

The applicant must fill these requirements within 620 days of receiving the letter of intent. Once it’s done, the Department sends a signed VNO license agreement to the applicant, granting the company permission to become a Virtual Network Operator.

What went wrong with those 71 Virtual Network Operators?

The process of obtaining the VNO license isn’t that complicated. It doesn’t require a specific mindset or rocket science. All you’re required to fulfil all the requirements of the DOT within the deadline that it gives you. However, staying within the deadline was something that those 71 VNOs couldn’t do.

In short, they didn’t pay their entry fee or deposit their financial bank guarantees within 60 days of getting the Letter of Intent. In response, the Department of Telecommunication cancelled their Letter of Intents.

What does the cancellation mean?

For the short-sighted, the cancellation of the letter of intent means the cancellation of the VNO license. India, as we say, is pretty non-lenient when it comes to compliances. You need to be on time when fulfilling the compliances.

However, there is a way out for those 71 VNOs, and it’s to submit a request to get a letter of intent – re-issued to them.

In short, the VNO license is not out of their reach. But, they need to provide a good enough reason they weren’t able to fulfil the compliances within 60 days in the first place.

How you can prevent the cancellation of your Letter of Intent?

While submitting a request to get another letter of intent seems like an easy way out, it’s truly isn’t. For one, your reasons need to be genuine enough for the Department of Telecommunication. When issuing the LOI, the DOT gives you its stamp of approval – believing that you’re a serious service provider. And when you don’t fulfil the instructions within that letter within the prescribed deadline, you hurt that belief.

Secondly, even if the request is accepted, the DOT can delay in issuing you the VNO License agreement. And in this fast-paced world where there is a dollar amount attached to every second, you can’t afford to lose any more money.

Therefore, you need to have the zeal from the very start to fulfil the instruction of LOI within the prescribed deadline.

Are you interested in starting your own VNO ISP? If so, consult with our VNO License consultants

 

For consultations for all kinds of Business Registrations, contact Registrationwala


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