What should you do to start an ISP in India?

Telecom sector is one that didn’t suffer devastation during COVID times. When the world was huddled inside, it was the internet that kept it spinning. It’s because more people started to leverage internet services to keep their jobs and run their organization. It created a vacuum where there were many internet seekers but not many ISPs. As a result, the demand of ISP license has also risen. If you’re one of the ones demanding it, here is what you should do to start an ISP in India. 

Choose the area in which to provide your services: Choosing the type of ISP license

You must start the process of starting an ISP by taking some major decisions. One of them is to choose the size of area in which to provide your services. You have three choices before you:

1. You can provide internet to all the country. It would require you to apply for category A ISP license. 
2. You can opt to provide internet access in a metropolitan city or one state which would make you apply for category B ISP License in India. 
3. Or, you can choose the most cost-efficient ISP license, category C and get the power to provide internet services to a small town, or a village.

Your choices will determine your Entry fees, the financial bank guarantee and the performance bank guarantee you need to pay for ISP license:

1. Entry Fee:
   1. For category A, it’s 30 Lakh rupees 
   2. If you choose category B, it’s 2 lakh rupees. 
   3. For Category C, it’s mere 20,000 rupees
2. Financial Bank guarantee
   1. For category A, it’s 2 Lakh rupees 
   2. Choosing category B? Your FBG would be 20,000 rupees. 
   3. For Category C, it’s mere 2,000 rupees
3. Performance Bank Guarantee
   1. For category A, it’s 40 Lakh rupees 
   2. Selecting category B would require you to pay FBG of 2 lakh rupees. 
   3. For Category C, it’s mere 10,000 rupees

Note: The above costs are amended ones as per the notification from the DOT that reduced the bank guarantee requirements by 1/5th of the original. 

Start an ISP company in India

After choosing the area you want to cover with your ISP services, you must establish a company in that area. The process is as follows:

1. Choose an appropriate name for your company. Make sure that it’s unique and as per the rules of the Companies Act, 2013.
2. You must reserve the above name you’ve chosen. Thus, file a RUN (Reserve Unique Name) application. It will associate the name exclusively to you. 
3. Obtain the DSC of the directors of the company to fill the online application of company incorporation. 
4. After obtaining the Digital Signature certificate, you must state the objective of your company in Memorandum of Association
5. Specify the rules and regulations of your company in Articles of Association
6. Attach the above two documents with the following:
   1. ID proof of the directors
   2. Address proof of the directors and shareholders
   3. Authorized capital details
   4. Paid-up capital details
   5. Address proof of the registered office. 
7. Fill the online SPICe application form for company incorporation. To ensure correctness when applying, get the aid of a Company Secretary. 
8. Wait as the Registrar of Companies analyzes your application and assesses the documents you’ve provided. 
9. If the Registrar approves of your application, you’ll receive a certificate of incorporation. 

Furnish the required documents for ISP registration

After establishing your business entity from where you will run your ISP, you must start putting the ISP license documents together. They are as follows:

1. Certificate of Incorporation
2. Memorandum of Association
3. Articles of Association
4. List of directors and shareholders of the company
5. Equity details of the company 
6. Net worth certificate of the company. 
7. Audited Balance sheet of the company. 
8. Description of the services you seek to provide. It can be generic since providing internet services if your primary objective. 

File the online ISP application

After you’ve put together all the documents in a scanned format, go to Saralsanchar. From there, you need to register, login and fill the ISP registration application form. On the last page of the form, you’ll observe a button to upload the required documents. Do so and finalize your submission by depositing the application processing fee. 

Receive the letter of intent

Unless you’ve a consultant to help, it would take days, even months for the DOT to pick up your application. When it does, it will thoroughly assess your documents. The Department of Telecommunication would answer even the smallest error you’ve made with a notification of objection. If it doesn’t encounter any errors, you’ll receive a letter of intent. 

Submit the rest of the ISP license fees

The application processing fee that you pay is merely for DOT to process your application. Once your application has the approval, you’re required to deposit the payment that will lead you to obtain ISP license agreement. The payments are:

1. Entry fee
2. Financial and Performance Bank guarantees. 

Submit the above payments and email their proofs to Department of Telecommunication. Once it receives them, you’ll obtain a signed ISP license agreement. 

Conclusion

To start an ISP in India, you must follow a straightforward process. It starts from making  a choice about the category of ISP to signing the license agreement. Once you sign the agreement, get in touch with an telecom service provider and onboard them to start operations as soon as possible.