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November 3, 1997


ISP license details announced

The draft Internet licence guidelines being prepared by the Department of Telecommunications envisages a licence fee of Rs 600 per subscriber payable annually after five years of Internet service provider operations.

The Internet policy cleared by the union cabinet last fortnight waived licence fees for the first half of the 10-year licence period.

The guidelines also envisage a city-wise licence to the ISPs rather than a national or state-wide licence.

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Although this has not been finalised yet, ISPs are dismayed with the move since it will entail making applications for each one of the cities and towns they plan to operate in.

Several ISPs with nation-wide plans on the drawing board are looking at operations in more than a score of cities and towns.

The licence guidelines, which are expected to be finalised before the end of the year, also suggest an earnest money deposit of Rs 2 million for Class A cities, Rs 500,000 for Class B cities and Rs 100,000 for Class C cities.

The Class A cities are Delhi, Bombay, Madras, Calcutta, Bangalore, Ahmedabad and Hyderabad.

The department also plans to introduce certain financial and performance guarantees on lines of similar guarantees in the case of basic, cellular and paging service tenders.

The ISPs will have to provide financial guarantees of Rs 5 million each for Class A cities, Rs 2 million each for Class B cities and Rs 200,000 each for Class C cities. Performance guarantees for similar cities are to be pegged at Rs 2.5 million, Rs 1 million and Rs 100,000.

Top DoT officials said that in absence of feedback from potential ISPs about future revenues, the department may be forced to introduce the Rs 600-per-user annual licence after the fifth year of the Net service providers' operations.

Telecom Secretary A V Gokak had requested ISPs and industry associations like the Confederation of Indian Industry and Federation of Indian Chambers of Commerce and Industry to suggest the licence fee to be enforced.

DoT functionaries have worked out the annual Rs 600-per-user figure using the current revenues and future cash flow projections of the Internet service of the Videsh Sanchar Nigam Limited.

The country's international telecom carrier has some 48,000 subscribers to its Gateway Internet Access Service.

VSNL charges Rs 15,000 for 500 hours use of a TCP/IP (transfer control protocol/ Internet protocol, which allows graphics access on the Net) account and Rs 5,000 for a shell account (500 hours), which only enables text access.

The state-owned telecom major's GIAS has concessional rates on the shell account for students. On an average, realisation of some Rs 10,000 per subscriber, VSNL is expected to have made some Rs 480 million on the GIAS.

An 'implementation panel' is translating the ISP policy into practice

- Compiled from the Indian media

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