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The use of the internet has increased rapidly in the last few years and now it has become a part of day to day life. Everyone needs an internet connection, there is an increase in demand. To start an Internet Service Provider (ISP) business, one should have an ISP license.
Before jumping into the application process, you must know the details and categories of ISP licenses. It will help you decide which category license you need and how much it will cost you.
Internet Service Provider (ISP) License is services to provide internet services to individuals or businesses. The Government of India came up with one license for all telecom related services known as Unified License.
In this, a service provider can apply for ISP license authorization of different services in different areas. An individual or company must have a Unified License to obtain authorization to provide internet services. A company can hold only one license to provide services.
In India, there are three types of categories of ISP license to obtain a license and provide internet services. The type will depend on the scale of city, state, town, district or village. Basically there are three types of ISP licenses which are differentiated by the scale of coverage area/ territory.
Class A - National Area
Class B - Metro Area/ Telecom Circle
Class C - Secondary Switching Area
This license is for PAN India operations which means the services can be provided all over India. License holders of class A ISP are very few in India because of the high license fees.
If we talk about the entry fees, it is 30 lakhs and the application fee is 50 thousand. This fee is not negotiable, that's why it is called foundation fees.
However, having a class A license is lucrative and if you have good funding, and are willing to have a unified license in category A then apply for ISP license.
If someone wants to provide internet service and have a Class B license, then it means the service can be provided in 20 major states or any of the following metro cities: Mumbai, New Delhi, Kolkata, Chennai, Bengaluru, Pune, Ahmedabad and Hyderabad.
However, for a new business the class B license will cost 13 lakhs and 15 thousand in total. So to operate ISP business in urban areas, one should choose a unified license in category B.
This license is only for a particular secondary switching area which is defined by the government and it can be a composition of several small villages, towns or districts. A class C license holder will only have access to 1 particular Secondat Switching Area (SSA), until he applies for the unified license.
As compared to the other two licenses, applying for a Class C license is inexpensive. In total it will cost you 90 thousand. For many startups it is a great way to start ISP services, if you want to provide internet services in a small town, village or district, go for an ISP class C license.
Following are the fees for ISP different category licenses. To obtain an ISP license in India, one must have the below mentioned fees to start an ISP business.
|
Services |
Minimum Equity |
Minimum Net Worth |
Entry Fees |
Performance BG |
Financial BG |
Application processing Fees |
Total Capital Required |
|
ISP A |
Nil |
Nil |
30 Lakhs |
2 Crores |
10 Lakhs |
50 Thousands |
2,40.50,000 |
|
ISP B |
Nil |
Nil |
2 Lakhs |
10 Lakhs |
1 Lakh |
15 Thousands |
13,15,000 |
|
ISP C |
Nil |
Nil |
20 Thousands |
50 Thousands |
10 Thousands |
10 Thousands |
90,000 |
Note: All the above amount is in Indian Rupees.
Following is the process to apply for an ISP license:
To Apply for ISP (Internet Service Provider) License, you need to log onto the www.saralsanchar.gov.in/ portal and create an account unless you are an existing user.
Once you’ve logged in, click on “Apply Now” option available on the Unified License tab.
Afterwards, you must fill in your company details and click on the “next” button for the next step.
Payment will be auto-calculated as per the selection of service authorisations selected.
Now, you need to upload all the necessary documents which are required in pdf format. You can check the documents you need in the “Required Documents” section of the page.
Thereafter, follow the instructions and finish the rest of the application by entering the owners and partners details.
Accept all the terms and conditions. In case you entered any wrong details, you can edit the application. Once you’ve cross checked everything, click on the “submit” option.
If there is no discrepancy, then “validation successful” will be displayed on the page and then you will be redirected to Bharatkosh Payment Gateway to make the payment. Once the payment is done, you can download a PDF of the completed application and upload a digitally signed PDF application before clicking on the final submission option.
Once DoT receives your application, an officer will be assigned to look into it. After accepting the application, he will issue LOI.
After receiving the LOI, you have to pay a one-time entry fee (non-refundable) along with Bank Guarantee details. Also, you are required to submit a signed license agreement with the DoT and provide documents mentioned in LOI.
If the entire process goes seamlessly and no errors are found, you will receive the ISP License. The DoT will notify you through the registered mobile number or email once the ISP License is issued.
Here are certain things you need to know before you apply for this license:-
Internet Service Provider business can certainly be profitable. The profit will depend on the areas you want to provide your internet services. If you provide the internet services across multiple states, there will be more subscribers as opposed to when your services are only limited to a small town.
If you provide internet service to 100 customers for 1 year, and you get INR 600 from each customer every month, you will earn a profit of INR 7200 annually from each customer. For 100 customers, you will make INR 7200 x 100 = INR 7,20,000.
If you do enough marketing and provide internet services at competitive rates, your business will surely thrive.
There are two ways to do this: You can apply for a franchise OR you can apply for a license. If you open up a franchise, you cannot bill directly to the customer i.e., bill would be made in the name of your parent company that owns the Internet Service Provider License. If you choose to own an internet business of your own, you have to apply for the ISP license provided by DoT.
If a company is registered under the Company Act, 2013, then it is eligible to obtain an ISP license. If the process of obtaining this license seems complicated to you, our ISP license consultants at Registrationwala can lend you a helping hand.
ISP License is granted by the Telecom Regulatory Authority of India (TRAI). The license comes with certain rights and limitations including:
It permits the licensee to provide internet services to customers with the help of wired and wireless technologies.
ISPs can allocate bandwidth to their customers on the basis of different plans and packages with different data limits and speeds. They can also provide additional services i.e., Virtual Private Networks (VPNs), browser and email services.
Licensees must adhere to the rules and regulations stated by TRAI and ensure data privacy and network security to the customers.
Licensees can only provide the internet services in permitted areas.
To obtain the ISP License, you need to have the following documents:
Copy of registration certified by Company Secretary/Statutory Auditor and countersigned by Director duly authorized by the company
Articles of Association certified by Company Secretary/Statutory Auditor and countersigned by Director duly authorized by the company
Memorandum of Association certified by Company Secretary/Statutory Auditor and countersigned by Director duly authorized by the company
Equity Details certificate from Company Secretary/Statutory Auditor countersigned by Director duly authorized by the company
Certificate from Company Secretary/Statutory Auditor countersigned by Director duly authorized by the company to disclose the status of foreign holdings
Networth of the company certificate from the Company Secretary/Statutory Auditor countersigned by the Director duly authorized by the company
Paid up the capital certificate from Company Secretary/Statutory Auditor countersigned by Director duly authorized by the company
MHA clearance (In case of foreign nationality CEO/CTO/CFO/Director)
Power of Attorney by Resolution of the board of Directors
Other Documents if any.
The ISP license is provided by DoT and the validity for this license is 20 years. Once it expires, you have to get it renewed to continue providing your ISP services.
The process of applying for ISP can be a bit complicated and time-taking. One has to make sure all the details are clearly and correctly filled during ISP registration to avoid application rejection. This can be a pain in the neck unless you have an ISP License Consultant to help you out.
An ISP License Consultant can guide you about the entire process and also do it on your end while you sit back and relax. Our ISP License Ninjas at Registrationwala come with years of experience on their hands and can make the entire process look like a cake walk!
If a Department of Telecommunication (DOT) is delaying the process to give response and raise an issue regarding incomplete application and documents, non-compliance, etc. To avoid such rejection on application in any category, hire Registrationwala to review your documents, and file application on your behalf to the department. The ISP licensing process is technical and has minor details which need to be filled carefully. It is always advisable to hire a professional to save time and money.
Hey there, I'm Dushyant Sharma. With the extensive knowledge I've gained in past 8 years, I have been creating content on various subjects such as banking, insurance, telecom, and all the important registration and licensing processes for various companies. I'm here to help everyone with my expertise in these areas through my articles.
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