ISP License in India: Categories, Procedure, and Compliance

ISP License in India: Categories, Procedure, and Compliance. The Government of India has introduced a structured and regulatory framework to ensure that Internet Service Providers (ISPs) operate in a lawful and systematic manner. The Department of Telecommunications (DOT), under the Ministry of Communications, is responsible for issuing the ISP License through the Unified License regime. In this article, we will explore all essential aspects of the ISP License in India, including its categories, benefits, eligibility, step-by-step application procedure, fee structure, required documents, and validity period.
What is an ISP License?
An ISP License is a formal authorization provided under the Unified License framework introduced by the Department of Telecommunications (DOT) to companies that wish to offer internet services in India. To offer internet connectivity, the applicant must first obtain a Unified License, under which the ISP authorization is granted for different geographic areas. There is no separate or standalone license for ISP services; the authorization must be secured under the Unified License.
A Unified License holder is eligible to apply for multiple ISP authorizations covering different service areas across India. The validity of the ISP authorization, however, is linked with the validity of the Unified License itself.
Regulatory Body for ISP License
The Department of Telecommunications (DOT), under the Ministry of Communications, is the primary authority that regulates and grants the ISP License. The government has implemented the Unified License system to streamline the licensing framework for all telecom services. By doing this, companies can operate multiple telecom services under one umbrella license, including internet service provision. Therefore, an entity must apply for ISP authorization under this Unified License to offer internet services legally.
Categories of ISP License
The ISP License is divided into three categories based on the size of the geographical area the license covers. These categories are designed to promote internet accessibility in both urban and rural regions of India:
Class A (National Area)
This category allows the service provider to offer internet services across the entire country. It is suitable for large telecom operators with significant infrastructure and financial capacity.
Class B (Telecom Circle/Metro Area)
This category permits services within a specific telecom circle or metro area. It is appropriate for medium-scale companies targeting a specific state or region.
Class C (Secondary Switching Area)
This category is for smaller areas such as districts, towns, or villages. It is ideal for startups and local businesses aiming to improve internet penetration in rural and underserved regions.
Benefits of Obtaining an ISP License
Obtaining an ISP License in India brings several strategic and regulatory benefits:
Legal Compliance
Obtaining an ISP License ensures that the business is legally authorized to provide internet services under the guidelines of the Department of Telecommunications (DoT). It protects the company from regulatory penalties, legal notices, and forced service shutdowns. Operating without a license can lead to serious consequences, including prosecution and financial loss. Thus, licensing is the foundation for secure and legitimate operations in the telecom sector.
Market Reputation
A valid ISP License boosts the credibility of a company in the eyes of customers, investors, and regulatory authorities. It demonstrates a commitment to following government regulations and maintaining high service standards. This builds brand value and attracts trust in competitive markets. It also gives the company a strong position when bidding for government or corporate contracts.
Operational Expansion
An ISP License allows service providers to expand operations into multiple states or service areas without needing separate licenses. It facilitates pan-India operations under the Unified License framework.  This scalability gives businesses flexibility in planning growth strategies. Additionally, companies can apply for different types of telecom services under the same license umbrella.
Access to Resources
Licensed ISPs can gain access to vital telecom infrastructure like right-of-way permissions, spectrum allocation, and tower sharing. They are eligible to participate in government-backed schemes and infrastructure support programs. It also allows interconnection with other telecom operators and national backbones. This access is important for delivering competitive and high-quality internet services.
Eligibility Criteria for ISP License Application
Before applying for the ISP License, an applicant must fulfill the basic eligibility criteria laid down by the DOT:

The applicant must be a registered company under the Companies Act, 2013 or the earlier Companies Act, 1956.

Only corporate entities are eligible; individual proprietorships or partnerships are not allowed to apply.

The company must comply with all legal and financial requirements as specified by DOT.

No minimum equity or net worth criteria have been prescribed by the DOT for applying to any of the three classes of ISP Licenses.
ISP License Fee Structure in India
The fee structure for ISP License varies depending on the category selected. The government has intentionally kept the cost of Class C licenses low to promote digital connectivity in rural and underserved regions. The fee structure is as follows:

Service

Entry Fee (INR)

Performance Bank Guarantee (INR)

Financial Bank Guarantee (INR)

Application Fee (INR)

ISP Class A

30 Lakh

2 Crores

10 Lakh

50,000

ISP Class B

2 Lakh

10 Lakh

1 Lakh

15,000

ISP Class C

20 Thousand

50 Thousand

10 Thousand

10,000

For example, to obtain a Class C license, a total capital of INR 90,000 is needed, whereas the total capital required for Class A is approximately INR 2.5 crores.
Procedure to Obtain an ISP License in India
The application process for obtaining an ISP License is procedural and must be followed step-by-step to avoid any delays or rejections.
Step 1 – Register a Company
The first step is to incorporate a company under the Companies Act. This involves applying to the Registrar of Companies (ROC), drafting the Memorandum and Articles of Association, appointing directors, and obtaining the Certificate of Incorporation. Only a registered company is eligible to apply for the Unified License.
Step 2 – Choose the ISP Category
Based on your business goals and the target market, choose one of the three ISP License categories: Class A, B, or C. Each category has a different cost and geographic scope, so the selection should align with your budget and operational strategy.
Step 3 – Budget Planning
The applicant must assess financial resources and determine the most suitable license category. Budget planning should account for entry fees, bank guarantees, and application processing fees. This step ensures that the company can comply with all monetary requirements of the DOT.
Step 4 – Fill in the Application Form
Once the license category is decided, the company must fill out the official application form. The processing fee (non-refundable) must be paid via Demand Draft or Pay Order in favor of Pay & Accounts Officer (Headquarters), DOT, payable at New Delhi. Two physical copies of the application along with supporting documents must be submitted.
Step 5 – Submit the Application
The completed application along with all necessary documents and payment details must be submitted to the Department of Telecommunications. The department usually takes about 60 working days to review and process the application.
Step 6 – Letter of Intent (LOI)
If the application meets all compliance requirements, DOT issues a Letter of Intent (LOI) to the applicant. If there are discrepancies, the application may be rejected, and the reasons will be communicated. Rejections usually occur due to incomplete documentation or non-compliance with DOT norms.
Step 7 – Post-LOI Compliance
Once the LOI is issued, the applicant is required to:

Pay the one-time entry fee applicable to the chosen category.

Submit the required Bank Guarantees (Performance and Financial).

Sign the License Agreement with the Department of Telecommunications.

The fee and guarantees post-LOI are as follows:

Rs. 2.4 Crores for Class A

Rs. 13 Lakhs for Class B

Rs. 90,000 for Class C

Step 8 – Final Confirmation
Once all the above requirements are fulfilled, the DOT issues a final approval and grants the Unified License with ISP authorization. This license is valid for a period of 20 years.
Documents Required for ISP License Registration
To complete the application process for an ISP License, the following documents must be submitted:

Certificate of Incorporation of the company

Memorandum of Association (MOA) and Articles of Association (AOA)

Details of the directors including DIN and identification proofs

Demand Draft or Pay Order for application fees

Two copies of the filled application form

Bank Guarantees (Performance and Financial) after LOI

Validity of ISP License
The ISP License, once issued under the Unified License framework, is valid for a period of 20 years. During this period, the licensee must comply with periodic reporting, service quality standards, and renewal procedures as per DOT norms. The ISP authorization remains valid as long as the Unified License is valid.
Conclusion
The ISP License is important for any company looking to provide internet services in India. With the increasing demand for reliable internet across cities, towns, and villages, more businesses are entering the ISP space. The government, through the Unified License regime, has streamlined the process and made it easier to operate under one license. By following the proper procedure, submitting all necessary documents, companies can successfully obtain the ISP License and contribute to India’s digital growth.
In case, you need any support, then you can reach out to Compliance Calendar LLP through mail at info@ccoffice.in or Call/Whatsapp at +91 9988424211.
FAQs
Q1. What is an ISP License and why is it required in India?
Ans. An ISP License is an authorization issued by the Department of Telecommunications (DOT) under the Unified License regime. It is mandatory for any company that wants to provide internet services in India. Without an ISP License, offering internet connectivity is illegal. The license ensures that the service provider is compliant with government regulations and helps maintain service standards across the country.
Q2. What are the different categories of ISP Licenses in India?
Ans. The ISP License is categorized into three classes based on geographical coverage:

Class A: National-level coverage across India.

Class B: Coverage within a specific telecom circle or metro area.

Class C: Coverage limited to a Secondary Switching Area (SSA), like a district or small town.
 The category chosen depends on the business’s operational scale and budget.

Q3. Who can apply for an ISP License in India?
Ans. Only companies registered under the Companies Act, 2013 or Companies Act, 1956 are eligible to apply for an ISP License. Individuals or partnerships are not allowed to apply. The applicant must also be able to meet the financial and documentation requirements set by the DOT.
Q4. What is the validity period of the ISP License?
Ans. An ISP authorization issued under the Unified License is valid for 20 years from the date of issuance. This duration is fixed and applies to all classes—A, B, and C. The validity of the ISP authorization is tied to the validity of the Unified License.
Q5. How much does it cost to obtain an ISP License in India?
Ans. The cost of obtaining an ISP License varies depending on the category:

Class A: Around Rs.2.5 Crores (including entry fee and bank guarantees)

Class B: Around Rs.13 Lakhs

Class C: Around Rs.90,000
 These costs include entry fees, financial and performance bank guarantees, and application processing fees.

Q6. How long does it take to get an ISP License in India?
Ans. The DOT typically takes around 60 working days to review and respond to the application after submission. If all documents are in order and there are no compliance issues, a Letter of Intent (LOI) is issued. Following the submission of fees and bank guarantees, the final license is granted.
Q7. Can I apply for multiple ISP authorizations under one Unified License?
Ans. Yes, a company holding a Unified License can apply for multiple ISP authorizations covering different geographical areas. For instance, a company may hold Class C licenses in multiple districts or even combine Class B and Class C authorizations based on their business expansion plans.

The Government of India has introduced a structured and regulatory framework to ensure that Internet Service Providers (ISPs) operate in a lawful and systematic manner. The Department of Telecommunications (DOT), under the Ministry of Communications, is responsible for issuing the ISP License through the Unified License regime. In this article, we will explore all essential aspects of the ISP License in India, including its categories, benefits, eligibility, step-by-step application procedure, fee structure, required documents, and validity period.

What is an ISP License?

An ISP License is a formal authorization provided under the Unified License framework introduced by the Department of Telecommunications (DOT) to companies that wish to offer internet services in India. To offer internet connectivity, the applicant must first obtain a Unified License, under which the ISP authorization is granted for different geographic areas. There is no separate or standalone license for ISP services; the authorization must be secured under the Unified License.

A Unified License holder is eligible to apply for multiple ISP authorizations covering different service areas across India. The validity of the ISP authorization, however, is linked with the validity of the Unified License itself.

Regulatory Body for ISP License

The Department of Telecommunications (DOT), under the Ministry of Communications, is the primary authority that regulates and grants the ISP License. The government has implemented the Unified License system to streamline the licensing framework for all telecom services. By doing this, companies can operate multiple telecom services under one umbrella license, including internet service provision. Therefore, an entity must apply for ISP authorization under this Unified License to offer internet services legally.

Categories of ISP License

The ISP License is divided into three categories based on the size of the geographical area the license covers. These categories are designed to promote internet accessibility in both urban and rural regions of India:

Class A (National Area)

This category allows the service provider to offer internet services across the entire country. It is suitable for large telecom operators with significant infrastructure and financial capacity.

Class B (Telecom Circle/Metro Area)

This category permits services within a specific telecom circle or metro area. It is appropriate for medium-scale companies targeting a specific state or region.

Class C (Secondary Switching Area)

This category is for smaller areas such as districts, towns, or villages. It is ideal for startups and local businesses aiming to improve internet penetration in rural and underserved regions.

Benefits of Obtaining an ISP License

Obtaining an ISP License in India brings several strategic and regulatory benefits:

Legal Compliance

Obtaining an ISP License ensures that the business is legally authorized to provide internet services under the guidelines of the Department of Telecommunications (DoT). It protects the company from regulatory penalties, legal notices, and forced service shutdowns. Operating without a license can lead to serious consequences, including prosecution and financial loss. Thus, licensing is the foundation for secure and legitimate operations in the telecom sector.

Market Reputation

A valid ISP License boosts the credibility of a company in the eyes of customers, investors, and regulatory authorities. It demonstrates a commitment to following government regulations and maintaining high service standards. This builds brand value and attracts trust in competitive markets. It also gives the company a strong position when bidding for government or corporate contracts.

Operational Expansion

An ISP License allows service providers to expand operations into multiple states or service areas without needing separate licenses. It facilitates pan-India operations under the Unified License framework. This scalability gives businesses flexibility in planning growth strategies. Additionally, companies can apply for different types of telecom services under the same license umbrella.

Access to Resources

Licensed ISPs can gain access to vital telecom infrastructure like right-of-way permissions, spectrum allocation, and tower sharing. They are eligible to participate in government-backed schemes and infrastructure support programs. It also allows interconnection with other telecom operators and national backbones. This access is important for delivering competitive and high-quality internet services.

Eligibility Criteria for ISP License Application

Before applying for the ISP License, an applicant must fulfill the basic eligibility criteria laid down by the DOT:

The applicant must be a registered company under the Companies Act, 2013 or the earlier Companies Act, 1956.
Only corporate entities are eligible; individual proprietorships or partnerships are not allowed to apply.
The company must comply with all legal and financial requirements as specified by DOT.

No minimum equity or net worth criteria have been prescribed by the DOT for applying to any of the three classes of ISP Licenses.

ISP License Fee Structure in India

The fee structure for ISP License varies depending on the category selected. The government has intentionally kept the cost of Class C licenses low to promote digital connectivity in rural and underserved regions. The fee structure is as follows:

Service	Entry Fee (INR)	Performance Bank Guarantee (INR)	Financial Bank Guarantee (INR)	Application Fee (INR)
ISP Class A	30 Lakh	2 Crores	10 Lakh	50,000
ISP Class B	2 Lakh	10 Lakh	1 Lakh	15,000
ISP Class C	20 Thousand	50 Thousand	10 Thousand	10,000

For example, to obtain a Class C license, a total capital of INR 90,000 is needed, whereas the total capital required for Class A is approximately INR 2.5 crores.

Procedure to Obtain an ISP License in India

The application process for obtaining an ISP License is procedural and must be followed step-by-step to avoid any delays or rejections.

Step 1 – Register a Company

The first step is to incorporate a company under the Companies Act. This involves applying to the Registrar of Companies (ROC), drafting the Memorandum and Articles of Association, appointing directors, and obtaining the Certificate of Incorporation. Only a registered company is eligible to apply for the Unified License.

Step 2 – Choose the ISP Category

Based on your business goals and the target market, choose one of the three ISP License categories: Class A, B, or C. Each category has a different cost and geographic scope, so the selection should align with your budget and operational strategy.

Step 3 – Budget Planning

The applicant must assess financial resources and determine the most suitable license category. Budget planning should account for entry fees, bank guarantees, and application processing fees. This step ensures that the company can comply with all monetary requirements of the DOT.

Step 4 – Fill in the Application Form

Once the license category is decided, the company must fill out the official application form. The processing fee (non-refundable) must be paid via Demand Draft or Pay Order in favor of Pay & Accounts Officer (Headquarters), DOT, payable at New Delhi. Two physical copies of the application along with supporting documents must be submitted.

Step 5 – Submit the Application

The completed application along with all necessary documents and payment details must be submitted to the Department of Telecommunications. The department usually takes about 60 working days to review and process the application.

Step 6 – Letter of Intent (LOI)

If the application meets all compliance requirements, DOT issues a Letter of Intent (LOI) to the applicant. If there are discrepancies, the application may be rejected, and the reasons will be communicated. Rejections usually occur due to incomplete documentation or non-compliance with DOT norms.

Step 7 – Post-LOI Compliance

Once the LOI is issued, the applicant is required to:

Pay the one-time entry fee applicable to the chosen category.
Submit the required Bank Guarantees (Performance and Financial).
Sign the License Agreement with the Department of Telecommunications.

The fee and guarantees post-LOI are as follows:

Rs. 2.4 Crores for Class A
Rs. 13 Lakhs for Class B
Rs. 90,000 for Class C

Step 8 – Final Confirmation

Once all the above requirements are fulfilled, the DOT issues a final approval and grants the Unified License with ISP authorization. This license is valid for a period of 20 years.

Documents Required for ISP License Registration

To complete the application process for an ISP License, the following documents must be submitted:

Certificate of Incorporation of the company
Memorandum of Association (MOA) and Articles of Association (AOA)
Details of the directors including DIN and identification proofs
Demand Draft or Pay Order for application fees
Two copies of the filled application form
Bank Guarantees (Performance and Financial) after LOI

Validity of ISP License

The ISP License, once issued under the Unified License framework, is valid for a period of 20 years. During this period, the licensee must comply with periodic reporting, service quality standards, and renewal procedures as per DOT norms. The ISP authorization remains valid as long as the Unified License is valid.

Conclusion

The ISP License is important for any company looking to provide internet services in India. With the increasing demand for reliable internet across cities, towns, and villages, more businesses are entering the ISP space. The government, through the Unified License regime, has streamlined the process and made it easier to operate under one license. By following the proper procedure, submitting all necessary documents, companies can successfully obtain the ISP License and contribute to India’s digital growth.

In case, you need any support, then you can reach out to Compliance Calendar LLP through mail at info@ccoffice.in or Call/Whatsapp at +91 9988424211.

FAQs

Q1. What is an ISP License and why is it required in India?

Ans. An ISP License is an authorization issued by the Department of Telecommunications (DOT) under the Unified License regime. It is mandatory for any company that wants to provide internet services in India. Without an ISP License, offering internet connectivity is illegal. The license ensures that the service provider is compliant with government regulations and helps maintain service standards across the country.

Q2. What are the different categories of ISP Licenses in India?

Ans. The ISP License is categorized into three classes based on geographical coverage:

Class A: National-level coverage across India.
Class B: Coverage within a specific telecom circle or metro area.
Class C: Coverage limited to a Secondary Switching Area (SSA), like a district or small town.

The category chosen depends on the business’s operational scale and budget.

Q3. Who can apply for an ISP License in India?

Ans. Only companies registered under the Companies Act, 2013 or Companies Act, 1956 are eligible to apply for an ISP License. Individuals or partnerships are not allowed to apply. The applicant must also be able to meet the financial and documentation requirements set by the DOT.

Q4. What is the validity period of the ISP License?

Ans. An ISP authorization issued under the Unified License is valid for 20 years from the date of issuance. This duration is fixed and applies to all classes—A, B, and C. The validity of the ISP authorization is tied to the validity of the Unified License.

Q5. How much does it cost to obtain an ISP License in India?

Ans. The cost of obtaining an ISP License varies depending on the category:

Class A: Around Rs.2.5 Crores (including entry fee and bank guarantees)
Class B: Around Rs.13 Lakhs
Class C: Around Rs.90,000

These costs include entry fees, financial and performance bank guarantees, and application processing fees.

Q6. How long does it take to get an ISP License in India?

Ans. The DOT typically takes around 60 working days to review and respond to the application after submission. If all documents are in order and there are no compliance issues, a Letter of Intent (LOI) is issued. Following the submission of fees and bank guarantees, the final license is granted.

Q7. Can I apply for multiple ISP authorizations under one Unified License?

Ans. Yes, a company holding a Unified License can apply for multiple ISP authorizations covering different geographical areas. For instance, a company may hold Class C licenses in multiple districts or even combine Class B and Class C authorizations based on their business expansion plans.