Standard Operating Procedure

Signing of ISP License Agreement - SOP

SOP Flow for License Agreement Signing

1

Applicant/Company Submission

  • Submit required documents to LSA (Local Service Area)
  • Documents include:
    • Entry fee receipt
    • Bank Guarantees (BGs)
    • Undertakings
  • Include address of place of signing
2

LSA Review

  • LSA views Letter of Intent (LOI)
  • Coordinates with applicant to resolve any queries
3

SS Portal Processing

  • Application processed through SS portal
4

Internal Coordination

  • SO LSA, NO LSA, and SOP coordinate
  • DS Cell involved in process
5

BG Submission Policy

  • BGs kept with LSA
  • Extension requests forwarded to DS cell if ER submitted
  • If not submitted within 90 days, intimated to DS
  • BGs may be returned if requirements not met
6

Signing Policy

  • SO signs agreement after NO LSA scrutinizes BGs
  • Agreement forwarded to CCA
7

License Issuance

  • License issued after successful completion
  • DS intimates to M(T)
8

Final Approval Process

  • Create file/mail attaching LOI, POA
  • Obtain DDG approval for SO to sign License Agreement
  • BGs and POA can be downloaded from portal
  • Coordinate through email/phone to fix Date of Signing (DOS)
Final

Completion

  • Sign the License Agreement
  • Mail first 3 pages of signed copy to DS
  • NO maintains License agreement and DDG approved file for records

Important Notes:

  • Approval file must contain only LOI and POA (no FR or BG)
  • Maintain lists of companies that crossed 45 days and those provided extensions
  • Ensure proper documentation at each step

Unified License(All Services)

Data Services operators can offer internet and internet telephony services. The type of license they apply for Category A, B, or C determines their operational area.

  • Category A

    Nationwide Internet Service Provider License for Pan-India operations, enabling providers to deliver broadband, leased line, internet telephony, and enterprise-grade connectivity services across all telecom circles in India.

    Best suited for ISPs aiming to cater to large-scale businesses, government projects, and multi-state network solutions.

  • Category B

    State-level ISP License designed for operations within a specific state or region. Includes services like broadband, VoIP, and last-mile connectivity in key urban and rural areas.

    This category is ideal for ISPs looking to establish a strong presence in a particular state, including major metropolitan areas like Mumbai and Delhi, with opportunities to scale within their licensed region.

  • Category C

    District-level ISP License tailored for localized telecom and internet services within specific Telecom District Circles, focusing on small towns, villages, and underserved areas.

    Primarily aimed at startups and small-scale ISPs targeting niche markets to bridge the digital divide by offering affordable broadband and internet solutions.

India Telecom Map

Unified License (UL)

Learn about the Unified License (UL) for Telecom Services in India.

Need for a Unified License

  • Convergence of Networks: Telecommunication services such as voice, data, and video are now being delivered through single networks. This convergence has eliminated the need for separate networks for different services, leading to more efficient and cost-effective operations.

  • Simplification of Licensing: Previously, telecom service providers had to obtain multiple licenses for different services, which created administrative burdens and increased costs. The Unified License simplifies this process by combining all services under a single license.

  • Enhanced Affordability and Access: By unifying services under one license, the government aims to reduce costs for service providers, which can be passed on to consumers. This also increases access to telecom services, especially in rural and underserved areas.

Approach to Unified License

  • Cafeteria Approach: The Unified License adopts a "pay as you eat" model, allowing service providers to choose the services they want to offer. This approach reduces the financial burden on smaller players, enabling them to enter the market with minimal capital requirements.

  • Flexibility for Service Providers: Service providers can start with a few services and add more as their business grows. This flexibility encourages innovation and competition in the telecom sector.

  • Support for Niche Segments: The Unified License is designed to support niche segments of the telecom market, such as rural broadband and enterprise solutions, by lowering entry barriers for specialized providers.

Structure of Unified License

  • License Agreement: The Unified License is divided into two main parts: the License Agreement and the Schedule to the License Agreement. The License Agreement outlines the general terms and conditions applicable to all services.

  • Schedule to the License Agreement: The Schedule is further divided into Part-I and Part-II. Part-I contains common terms and conditions applicable to all services, while Part-II includes service-specific terms and conditions.

  • Service-Specific Conditions: Part-II of the Schedule provides detailed conditions for each service, such as Internet Service, Access Service, and National Long Distance (NLD) Service. This ensures that service providers have clear guidelines for each type of service they offer.

Authorization under Unified License

The Unified License covers a wide range of telecom services, allowing providers to offer multiple services under a single license. Below are the key services included:

  • Unified License (All Services): Covers all telecom services under one license.
  • Access Service: Provides voice and data services within a specific service area.
  • Internet Service (Category A, B, C): Allows providers to offer internet services at national, state, or district levels.
  • National Long Distance (NLD) Service: Enables long-distance voice and data services within India.
  • International Long Distance (ILD) Service: Facilitates international voice and data services.
  • Global Mobile Personal Communication by Satellite (GMPCS) Service: Provides satellite-based communication services.
  • Public Mobile Radio Trunking Service (PMRTS) Service: Offers specialized communication services for businesses and organizations.
  • Very Small Aperture Terminal (VSAT) Closed User Group (CUG) Service: Provides private network services using satellite technology.
  • INSAT MSS-Reporting (MSS-R) Service: Supports reporting and monitoring services using satellite communication.
  • Resale of International Private Leased Circuit (IPLC) Service: Allows resale of leased circuits for international communication.

Special Features of Unified License

  • Delinking of Spectrum Allotment: The Unified License does not include spectrum allocation. Service providers must obtain spectrum separately through auctions or other government mechanisms.

  • Simplification of Licensing Regime: The Unified License replaces multiple licenses with a single license, reducing administrative complexity and costs for service providers.

  • Technology Neutrality: Service providers can use any technology to deliver services, promoting innovation and flexibility in the telecom sector.

  • Roll-out Conditions: Roll-out obligations are linked to the date of spectrum allocation, ensuring that service providers deploy services promptly after acquiring spectrum.

Financial Conditions at a Glance

Below are the financial requirements for various service authorizations under the Unified License:

Service Minimum Equity (Rs. Crore) Minimum Networth (Rs. Crore) Entry Fee (Rs. Crore) PBG (Rs. Crore) FBG (Rs. Crore) Application Fee (Rs. Crore)
UL (All Services) 25 25 15 44 8.8 0.010
Access Service 2.5 2.5 1 (0.5 for NE & J&K) 2 0.4 0.005
NLD (National Area) 2.5 2.5 2.5 0.5 1 0.005
ILD (National Area) 2.5 2.5 2.5 0.5 1 0.005
VSAT (National Area) Nil Nil 0.3 0.1 0.06 0.005
PMRTS Nil Nil 0.005 0.002 0.002 0.0015
GMPCS (National Area) 2.5 2.5 1 0.5 0.2 0.005
ISP "A" (National Area) Nil Nil 0.3 0.4 0.02 0.005
ISP "B" Nil Nil 0.02 0.02 0.002 0.0015
ISP "C" (SSA) Nil Nil 0.002 0.001 0.0002 0.001
Audio Conferencing/ Audiotex/ Voice mail service Nil Nil 0.1 0.02 0.002 0.0015
Machine to Machine ‘A’ (National Area) Nil Nil 0.3 0.4 0.02 0.005
Machine to Machine ‘B’ (Telecom circle/ Metro Area) Nil Nil 0.02 0.02 0.002 0.0015
Machine to Machine ‘C’ (SSA) Nil Nil 0.002 0.001 0.0002 0.001

General Terms and Conditions

  • Networth Definition: Networth is calculated as the sum of paid-up equity capital and free reserves, minus accumulated losses. Promoters' networth is excluded from this calculation.

  • Paid-up Capital: Licensees must maintain the minimum paid-up equity as specified in the Unified License throughout the license period.

  • AGR and License Fee: Licensees are required to pay a license fee of 8% of their Adjusted Gross Revenue (AGR). From the second year, the license fee is subject to a minimum of 10% of the Entry Fee.

  • FDI Compliance: Licensees must comply with the Foreign Direct Investment (FDI) policy, which allows up to 49% FDI through the automatic route. Any FDI beyond 49% requires approval from the Foreign Investment Promotion Board (FIPB).

Penal Provisions

Financial penalties for violations of license conditions:

Service Maximum Amount of Penalty per violation for each occasion in Service Area(Rs. Crore)
Access Service 50 Crore
NLD 50 Crore
ILD 50 Crore
ISP Cat A 1 Crore
ISP Cat B 20 Lakhs
ISP Cat C 10 Lakhs
GMPCS 50 Crore
PMRTS 10 Lakhs
VSAT CUG 1 Crore
Audio Conferencing/ Audiotex/ Voice mail services 20 Lakhs
M2M Cat A 1 Crore
M2M Cat B 20 Lakhs
M2M Cat C 10 Lakhs

Duration, Renewal, and Surrender

  • Duration: The Unified License is valid for 20 years from the effective date. Licensees can request a renewal for an additional 10 years during the 19th year of the license period.

  • Surrender: Licensees may surrender the license by providing a 60-day notice to the licensor. They must also notify their subscribers 30 days in advance and settle all outstanding fees before the surrender becomes effective.

Way Leave (Right of Way)

  • Right of Way (ROW): Licensees are responsible for obtaining the necessary permissions for laying cables and installing infrastructure. Delays in obtaining ROW do not exempt licensees from fulfilling their roll-out obligations.

PBG & FBG

  • Performance Bank Guarantee (PBG): Licensees must provide a PBG to ensure compliance with license conditions and performance obligations. The PBG is maintained throughout the license period.

  • Financial Bank Guarantee (FBG): The FBG secures the payment of license fees and other dues. After the first year, the FBG must cover the estimated license fee for two quarters.

General Security Conditions

  • Security Clearance: Foreign personnel involved in network installation, operation, or maintenance must obtain security clearance from the Government of India before deployment.

  • Network Security: Licensees must implement robust security measures, including network hardening, penetration testing, and risk assessment. Annual security audits are mandatory.

  • Customer Verification: Licensees must verify the identity of all customers before providing services. Photo identification is mandatory for all subscribers.