The internet has become an essential part of everyday life for millions of users in India. At present, there are approximately 958 million active internet users, which accounts for about 65-70 percent of Indian population. The increase in number of internet users has led to a rise in the number of Internet Service Providers. While there is significant competition in the network infrastructure market, this does not deter new players from entering the field.

If new entrants have the right resources and strategy, the competition should be viewed as an opportunity rather than as a deterrent. If you’re planning to start an Internet Service Provider Business, the time can never be this right. The demand in the market is high and there is a vast opportunity to succeed.

Who is an Internet Service Provider?

An ISP is a company that allows its subscribers to access the internet. The subscribers have to pay a subscription fee to the ISP for accessing the internet. The subscription fee varies depending on the different plans provided by ISPs. These plans offer different data speeds, data limits, etc. Internet Service Providers are also known as Online Service Providers and Internet Access Providers. 

Anyone who uses the internet is able to do so because of ISPs. In India, whoever wants to start an ISP business must obtain Internet Service Authorisation from the Department of Telecommunications.

Famous ISPs in India

Here’s a list of some famous ISPs in India. 

S. No. ISP
1. Jio
2. Airtel
3. MTNL
4. BSNL
5. Vi
6. Hathaway
7. Excitel Broadband
8. Atria Convergence Technologies 
9. Alliance Broadband
10. Spectranet

 

Checklist to Obtain Internet Service Provider License

Now, let’s discuss everything you need to do to start an ISP business:-

Create ISP Business Plan

Without proper planning, it can be difficult to determine all the necessary steps to achieve your desired outcome. Most entrepreneurs succeed when they have a proper business plan. Without proper business planning, the chances of failure are high.

Make an ISP business plan which can keep you focused and help you organize your goals and finances. Include the following essential elements:

  • Your Goal (where/how you want to operate and for whom, etc.)
  • Funds required for starting an ISP Business (infrastructure, license/approval, employees, etc.)
  • How you will provide service to customers
  • How much you will charge for the service
  • How you will deal with problems, such as maintenance and connectivity issues

Additionally, if you want a bank to fund your ISP business, a good business plan can help to increase your chances of success.

Register a Company

You need to register a company under the Companies Act, 2013 (except One Person Company). Sole proprietorships, partnership firms, etc., are ineligible to secure the ISA authorisation to start an internet business. For assistance in registering a company, you can connect with Registrationkraft’s company registration consultants anytime. We’d love to serve you!

Check your local regulations

Every state or region has its own set of regulations and guidelines for starting and operating a new Internet Service Provider business. We recommend you to visit your closest government office for advice or check the official government websites for the latest information. Alternatively, you can connect with our team.

Get Internet License

The internet license, officially known as the Internet Service Authorisation, is a legal authorisation that allows entities to provide internet services to customers. It was previously referred to as an ISP license. 

The Internet Service Authorisation is issued by the Department of Telecommunications (DoT), which comes under the Ministry of Communications, Government of India. Only companies registered under the Companies Act, 2013, can receive this authorisation (except One Person Companies).

What are the Internet Service Authorisation Categories?

Entities can apply for an Internet Service Authorisation (ISA) either as a Network Service Operator (NSO) or a Virtual Network Operator (VNO), depending on type of network infrastructure they intend to use and area in which they want to provide their services. An NSO can provide internet services through its own telecommunication network infrastructure instead of using another telecom entity’s telecom infrastructure. A VNO, however, provides internet services using the telecommunication network of a Parent NSO rather than using its own network.

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Under both NSO and VNO, the Internet Service Authorisation is further divided based on service area coverage. Depending on geographical area where they want to provide internet services, applicants can choose between a National Area authorisation and Telecom Circle/Metro Service Area authorisation.

Internet Service Authorisation – NSO

An NSO can apply for below-mentioned Internet Service Authorisations with DoT:

  • Internet Service Authorisation (National):- This authorisation allows an NSO to provide internet services across the National Area, i.e., across the entire country.
  • Internet Service Authorisation (Circle/Metro):- This authorisation allows an NSO to provide internet services only within a Telecom Circle or Metro Service Area.

Internet Service Authorisation – VNO

A VNO can apply for below-mentioned Internet Service Authorisations with DoT:

  • Internet Service Authorisation (National Area):- This internet authorisation allows a VNO to provide internet services across the National Area by utilizing a parent NSO’s network.
  • Internet Service Authorisation (Telecom Circle/Metro Service Area):- This authorisation allows a VNO to provide internet services within a Telecom Circle/Metro Service Area by using the telecom network of a parent NSO.

Must read:- What is the procedure of IP-1 license registration in India? 

Documents Required for Internet Service Authorisation

As there are different categories of internet service authorisation, the exact documents may vary depending on authorisation. However, the following documents are generally required while filing an application for the authorisation with DoT:-

  • Certified copy of Board Resolution authorising submission of application.
  • Certified copy of Board Resolution authorising the person signing application as authorised signatory.
  • Power of Attorney in favour of authorised signatory.
  • Certified copy of Board Resolution appointing auditor and auditor’s acceptance letter.
  • Certified copies of Certificate of Incorporation, Memorandum of Association and Articles of Association. 
  • Certificate confirming compliance with foreign direct investment policy.
  • Certificate confirming that applicant meets eligibility criteria under Telecommunications (Authorisation for Provision of Principal Telecom
  • Certificate confirming net worth of applicant.
  • Certificate confirming paid-up equity capital of the applicant.
  • Certificate providing breakup of paid-up equity capital into Indian and foreign equity.

What is Internet Service Application Process?

For obtaining the IS authorisation, you must file an application with the Department of Telecommunications. Here’s how the entire application process takes place:-

Step 1:- Prior to filing the ISA application, it is necessary to ensure that the entity fulfills DoT-prescribed eligibility criteria for the ISA.

Step 2:- Once the entity is believed to meet the criteria, all the necessary documents for filing the ISA application must then be prepared in accordance with DoT guidelines.

Step 3:- Once the eligibility criteria is met and required documents are in place, the applicant must begin filling out the application form available on Telecom e-Services Portal. 

Step 4:- Once the form is complete, the applicant must submit it on the portal by paying the application processing fee.

Step 5:- Upon receipt of the application, DoT shall review it carefully to verify its alignment with the telecom authorisation rules and guidelines. After that, the Department shall issue the Letter of Intent (LoI) to the entity.

Step 6:- The entity must comply with conditions of the LoI within the prescribed time. During this step, the entry fee and initial guarantee must also be submitted with the Department.

Step 7:- After completion of the above step, the DoT shall issue the ISA to the applicant. Thereafter, the applicant can review and download it through the portal.

Effective Marketing Strategies for Your ISP Business

Here are a few effective marketing strategies for a successful ISP business:-

Search for the suppliers

It might be a bit difficult for you to locate a wholesale bandwidth supplier since the ISP industry is highly disorganized. Make sure you do your homework and consult with professionals to find out which bandwidth provider would be right for you, based on your needs and expectations.

Calculate your expenses

The bandwidth cost can be quite high. After you and the wholesale provider have worked out the bandwidth cost, you need to start noting all your estimated costs, including:

  • Cost of space or place for data servers to be kept
  • The cost of large-scale bandwidth
  • Expense of software or hardware
  • Marketing and sales’ cost
  • The cost of the service

Create a Pricing Plan

Your pricing plan needs to be thought through very carefully. You need to keep in mind the estimated users, demand of data, local competition and the structure of their pricing.

Market your Service

Most of your customers are going to be those individuals who already have an internet connection. You need to do marketing for your services to convince them that you are providing better services at competitive prices and more exciting offers than the other existing ISP businesses. Some ideas for your ISP business’ marketing plan may include: 

  • Ad space in magazines and newspapers
  • Ads on regional TV channels
  • Flyers to customers near your relay towers
  • Door-to-door marketing to promote your service offering
  • Email marketing
  • Marketing through social media platforms
  • Online presence by creating a business website

Invest in Technology

Invest in the latest technology for your ISP business. You can get field service management software which can help to track and manage your business smoothly. It is necessary to have a good software which can track data usage, send invoices, create orders related to work, optimize routes and manage your workers and customers at the click of a button. It’ll help you save up a lot of time. 

Common Types of Internet Service Providers

Mentioned below are the different types of ISPs:-

  • Wireless ISP: Wireless ISPs make use of wireless technology to offer internet access with the help of a wireless network system. They allow their clients to connect to their servers with the help of wireless connections such as wi-fi enabled laptops and mobiles at the convenience of tethering hotspots.
  • Access Provider: Access Providers have to pay subscription fees to end service providers and provide the end-user the internet connection’s access which includes wi-fi, dial-up, fibre optics, cable, modems, integrated services, satellites, etc.
  • Mailbox Provider: This type of ISP offers hosting domain mailboxes which can receive and store emails.
  • Transit ISP: The Transit ISPs provide a large bandwidth which ensures hosting and access ISPs in order to maintain the internet service. Such providers pay for the transmission to the ISP which is above them and charge their customers for the internet as they use it.
  • Virtual ISP: Virtual ISPs buy services from other wholesale ISPs. Customers of virtual ISPs connect to internet services which are under the virtual ISPs’ brand names while the ‘wholesale ISP’ operates and regulates the infrastructure.
  • Free ISP: As the name suggests, a free ISP offers free internet services. They often show advertisements to their internet users.
  • Hosting ISP: This kind of ISP offers facilities and services such as email, cloud web hosting, virtual servers and physical server operation services.

Different Types of Services Under ISP

An ISP can generally provide the following types of services with appropriate authorisation:

Cable

A cable is important for accessing the internet on TV. A coax cable is required for providing high-speed data service. A fixed bandwidth is provided to share with users and the data speed depends on the number of users using the internet. Generally, the upload speed ranges between 5 to 50 Mbps while the download speed ranges between 10 to 500 Mbps.

Fiber

Fiber optic cables are used for data transmission in this internet service. It offers better speed compared to the cable. Download speed ranges between 250 and 1,000 Mbps while the upload speed ranges between 250 to 1,000 Mbps. This type of internet service is most appropriate for online gamers, heavy internet users and graphic designers. 

Digital Subscriber Line (DSL)

In this, the service providers make use of telephone lines to provide internet services to the customers. Because of its low speed, most customers prefer to use cable and fiber. The upload speed of DSL ranges between 1 to 10 Mbps and the download speed ranges between 5 to 35 Mbps. This is ideal for those who don’t have much work to do on the internet.

Satellite

The satellite internet connection has two parts, a one way connection and a two way connection. For one way connection, a dial up connection is required to download data using satellite connection. In case of two way connection, both download and upload services come through the satellite service. It’s a slow process wherein the upload speed is of 3 Mbps and download speed is between 12 to 100 Mbps.

Final Words…

The internet has become an important part of everyday life in the 21st century. The rise in the number of internet users has led to the rise in the number of Internet Service Providers (ISPs). Opening up an ISP business isn’t as complicated as some might think. But it does take a lot of preparation and understanding of your target market and the entire internet market. The steps in this article will ensure your ISP business will be a profitable one. If you need additional help, you can always get in touch with one of Registrationkraft’s team leaders. We’re always here to serve our client’s needs.

Frequently Asked Questions (FAQs)

Q1. What is the validity period of an internet service authorisation?

The internet service authorisation granted by DoT comes with a validity of 20 years. An ISP business has to apply for authorisation renewal to continue providing ISP services after this period.

Q2. Can a partnership firm obtain ISA – VNO?

No. Only companies registered under the Companies Act, 2013 (except OPC) can obtain ISA – VNO.

Q3. What is broadband? 

A broadband is a multiple high-capacity transmission system which carries data, calls and videos over long distances at a fast speed. Fiber optic, coaxial cables and radio waves are all included in the transmission media. Most internet users around the world get broadband through their mobile phones.

Q4. Which is the designated portal for filing Internet Service Authorisation applications with DoT?

The Telecom e-Services Portal is the designated portal for filing Internet Service Authorisation applications with DoT.