Since 1998, when private INTernet service providers (ISPs) were first allowed, more than 750 licences have been snapped up. Today, there are just 370-odd operators around, and of these just 20 serve 98 per cent of the market, while the others (that’s 350 of them) make pretence of competing.
Fed up with firms first queuing up for ISP licences and then turning them in (one in every two licences is eventually surrendered), Sanchar Bhawan, home to the Department of Telecommunications, has decided to tighten the rules to keep the frivolous players out.
For starters, the entry fee has been increased, besides which the new ISPs will have to deliver on certain revenue commitments. Category-C licences (where the performance bank guarantee was a mere Rs 3 lakh compared to Rs 2 crore for A circle and Rs 20 lakh for B-category) have been abolished.
Now on, licence seekers would have to pay a one-time entry fee of Rs 20 lakh for Category-A and Rs 10 lakh for Category-B licences before signing the licence agreement.
That apart, the ISP would be charged an annual licence fee at 6 per cent of the adjusted gross revenue, subject to a yearly minimum of Rs 50,000 and Rs 10,000 for Category-A and B operators, respectively.
According to DoT officials, there are 75 applications that have come in since November last year. With the new guidelines in place, not many are expected to turn up to take the licences.