How to get a VNO License in India

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The advent of present-day Information and Communication Technology has led to a paradigm shift in the communication industry. The emergence of VNOs is one such advancement which simplifies internet services and makes it more accessible.

What is VNO?

A Virtual Network Operator or Mobile Virtual Network Operator is an internet service reseller extending high-quality network and management services to other networking companies that do not possess their own telecom setup.

A VNO (Virtual Network Operator) License is a miniature version of an ISP license. With an ISP license, you can run internet services on a larger domain. ISPs who wish to operate small level internet service only in a particular territory can choose a VNO license instead of an ISP license. VNO is affordable, less complicated, convenient and ideal for small level ISPs.

Benefits of VNO

  • Comparatively cost-effective
  • Reduced network complexity
  • Reduced time to market
  • Reduced CAPEX
  • Increased flexibility

Limitations of VNO

  • Limited scope
  • More competition
  • Dependency on owners of the underlying infrastructure
  • Less control over downtime
  • No ownership

How is it Different from Normal ISP License?

  • VNO license is issued for a term of 10 years without bank guarantee whereas ISP license is issued for 20 years and with a bank guarantee.
  • ISPs can provide ISP franchisee to other telecom companies, but VNOs cannot give franchisees.
  • ISPs have the liberty to buy and use the bandwidth of other ISP, VNOs cannot do this.

The process of  getting a VNO License

  1. Check Eligibility

To get the approval of VNO license you should be a company registered under Companies Act, 1956. Preference is given to Pvt. Ltd. Companies over sole proprietorship/partnership companies. To know more about company registration you can log on to the Registrar of Companies’ website.

2.Category Selection

Select the category in which you want to apply for the VNO License, opt between A, B or C category. The three different categories of VNO license in India are bifurcated geographically based on the city, state, village, town where you will operate your business. VNO license is cheapest for class C.

Categories:

  • Class A ISP(PAN India)
  • Class B ISP(Telecom Circle/Metro Area)
  • Class C ISP(Secondary Switching Area)
  1. Cost analysis and setting budget

To grow internet services in rural Indian towns and villages our government has kept prices extremely lower for category C compared to category A and B.

You can browse the following table to understand costing requirements to obtain a VNO 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” (PAN India) Nil Nil 15 Lakh Nil Nil 50 Thousand 15,50,000
ISP “B” (Telecom circle/Metro Area) Nil Nil 1 Lakh Nil Nil 15 Thousand 1,15,000
ISP “C” (SSA) Nil Nil 10,000 Nil Nil 10 Thousand 20,000

 

As per the above table, a Class C VNO license cab be acquired at 50,000 rupees approximately varying on the basis of lawyer and ISP consultant fee.

  1. Application filling

You are required to fill a VNO license form to acquire the license. Every applicant needs to pay a non-refundable amount of Rs. 15,000 towards processing fee, provide all mandatory documents, and 2 copies of the application form. Send all this with pay order or demand draft payable at headquarter in New Delhi in the name of Pay & Accounts Officer (Headquarter) DOT.

  1. Document Verification

The next step in the process is document verification, it is conducted by Department of Telecom. The verification process may take about 60 days depending on the issues arising during verification.

If everything is fine and your application is approved, you will receive a ‘Letter of Intent’ by DOT. If your documents do not comply with the application guideline there are chances that your application may be rejected. Before submitting you should get your application reviewed by a professional ISP consultant/lawyer.

  1. Letter of Intent

Once your application for VNO License has been approved, DOT will issue a ‘Letter of Intent’ in your favor. After receiving the ‘Letter of Intent’  you are required to submit a non- refundable one-time entry fee, the signed license agreement and other requisite documents mentioned in the letter within the time mentioned in it.

  1. Confirmation

If everything falls into place you will receive the VNO License for ISP under the Unified License for a period of 10 years. The information related to confirmation of license issue will be communicated directly to you via DOT.

The VNO licensing process is pretty complicated for a common man. There have been incidents where applications were rejected on the grounds of lack of information, non-compliance, incomplete submission, the inappropriateness of documents, etc. Thus, in order to save your valuable time and money, get all your documents duly verified by law experts and ISP consultant before filling the application form.

We hope that the above article has been helpful in resolving your queries regarding VNO licensing. if you have any further query or suggestion please let us know, mail us on marketing@mumbai-ix.net

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