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VNO license: The General Terms and Conditions associated with it

VNO license is a permit issued by the Department of Telecommunication that allows you to provide internet services through a VNO or a virtual network operator. As less hardware is involved in VNO, the general terms and conditions associated with this unified license can be quite complex to understand.

But don’t worry, for we are making it easy. There are 12 general terms and conditions associated with signing the unified license agreement to start a VNO. We have explained all of them in brief through this blog.

Condition one: About the ownership of the company issued the VNO license

Following are the points to remember for this general condition:

  1. Foreign contribution is allowed up to 49 percent. Beyond that, FDI approval is necessary.
  2. Any changes in the shareholding pattern of the company should be communicated to the DOT.
  3. Any change in the name of the licensee company should be communicated to the DOT.
  4. To provide all the services, the licensee should have minimum paid up equity capital of INR 10 Crore
  5. The licensee should always maintain that minimum paid up capital.

Condition 2: Scope of the license

Following are the points associated with the scope of UL VNO license:

  1. The license will be issued to a company on non exclusive basis.
  2. The licensee can establish telecommunication networks under NSO network
  3. The licensee should only provide internet services using equipments that comply with the DOT standards.
  4. The licensee is not allowed to provide any service that requires different license
  5. All the infrastructural responsibilities will fall on the licensee’s shoulders.

Condition 3: License duration

Following are general conditions associated with the duration of the license:

  1. The unified license DOT for VNO will be valid for a period of 10 years.
  2. The VNO license in India can be reviewed after 4 years.
  3. Once the VNO license agreement expires, the contract between NSO and VNO will also terminate.

Condition 4: Renewal of the MVNO license

Following are the points associated with the renewal of VNO license Agreement.

  1. The licensee can choose to renew the VNO license by the end of the 10th year of it’s validity period.
  2. The licensee must pay the VNO license renewal fee.
  3. The license renewal will be subject to how compliance the licensee was during the time he held the license.

Condition 5: Modifications of these terms and conditions

Don’t consider these terms and conditions as permanent. The Department of Telecommunication has the power to modify whenever it deems it fit to do so.

Condition 6: Transfer of license

Following are the points of conditions pertaining to the transfer of license:

  1. Licensee is not allowed to transfer the license to another without taking consent of the DOT.
  2. The licensee is not allowed to get into a partnered agreement with another without DOT’s consent.
  3. The licensee is not allowed to sub-lease the bandwidth without DOT’s approval.
  4. In case of mergers and acquisition, the transferral or change in ownership of the license will depend on the DOT’s rules.
  5. Transfer or assignment of VNO license can only take place if the transferor has fulfilled all the compliance associated with the license during the time he held it.

Other Useful License: BIS License

Condition 7:  Service provision

Following are the terms and conditions associated with the provision of service of the license:

  1. The licensee has the power install all the hardware he has received from the NSO for providing services. However, prior approval from DOT is still required.
  2. The licensee is only allowed to commence his business after DOT’s approval.

Condition 8:  Service delivery

Following are the service delivery terms and conditions that the licensee has to follow:

  1. The licensee will inform the TRAI of service commencement 15 days before of that commencement.
  2. All Virtual Network Operators can create their own service delivery platforms for billing, VAS and customer service.

Condition 9: Furnishing the information

As per this condition, the holders of VNO license will have to furnish whatever information the DOT requires, in whatever way it’s demanded and at whatever time it’s asked for.

Condition 10:  Terms for revocation of license:

Following are the points to keep in mind to prevent your VNO license from getting terminated:

  1. The licensee will be subject to financial penalty with each violation.
  2. The DOT can suspend the services of the VNO license holder at any time the DOT deems it fit. And, it can do so without providing any explanation.
  3. Under the following conditions, the DOT can explicitly remove the VNO license without informing the licensee:
    1. if the licensee fails to perform any required obligations
    2. If the licensee goes into bankruptcy
    3. If TRAI has recommended the DOT to remove the license
    4. IF the licensee fails to comply to the Foreign Deposit Norms.

Condition 11: Conditions to exit from VNO business;

Following are the conditions for the license holders who want to exit from VNo service.

  1. Customers should be informed 30 days before the licensee applies for surrendering the VNO license.
  2. For services other than mobile, the customers will be migrated to the NSO when the license is surrendered
  3. The DOT has the power to take over the services of the Licensee once he surrenders his VNO license.
  4. During the time the license cancellation process is going on, the licensee’s duty is provide quality internet services to the internet subscribers.

Condition 12:  Force majeure

Following are the conditions pertaining to force majuere:

  1. If the services are effected by any act of god or war something that the licensee didn’t have any control over, the services will be resumed after the events.
  2. The time lost during the force majeure as above won’t be extended for the licensee.

Conclusion

Here are the general terms and conditions associated with VNO license. If you want to dig even deeper and prepare before signing the unified license under the category of your choice, reach out to our DOT consultants.

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    27 Aug 2019
    Tomas Mandy

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    1. author
      27 Aug 2019
      Britney Millner

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    27 Aug 2019
    Simon Downey

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