VNO License: Its Financial Terms and Conditions

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VNO License

Despite its virtual and non-hardware way to provide internet services, not everyone can afford to be a Virtual Network Operator. For VNO license, the permit to become such an operator, the Department of Telecommunication has set up certain financial conditions. Adhering to these conditions aren’t only necessary to get this unified license, but it’s also mandatory to retain your business.

Thus, in this article, we are going to talk about the financial terms and conditions that you need to comply with when applying for UL VNO license.

A note before you go in. All of these conditions are related to the VNO license cost in some shape or form. It should give you an idea why we stated that not everyone can afford to become a VNO.

Let’s start with the entry fee

Entry fee is referred to as a one-time non refundable fee. You have to pay it only once and even if your application faces rejection, it won’t be returned to you. The cumulative entry fee is equal to entry fee of each service you want to provide as a signatory of VNO license agreement. At maximum, it’s INR 7.5 Crore.

What is the license fee

Entry fee exists to allow you enter into the ISP market with your Virtual network and provide internet services. Consider it a ticket VNO license cost you pay at the gate. To become an actual player in this business game, you need a VNO license. And for that, you’re required to pay the VNO license fee or the SUC (Spectrum Usage Charges). Charged on an annual basis, the  license fee is important if you want to retain your VNO business.

It’s equal to 8 percent of the Annual Gross Revenue of your ISP business for which you obtained the VNO license in India. In the second year of holding the UL VNO license, you’re required to pay 10 percent of the entry fee that you paid at the time of getting the license. Some of the finer points that you need to keep in mind about license fee are:

  1. It needs to be paid in quarterly instalments
  2. You have to pay quarterly instalment of the license fee within 15 days of the completion of the relevant quarter.
  3. If one instalment payment is lower, the license holder has to adjust it in the later payments within that financial year.
  4. Delaying the license fee instalment will attract interest of 2 percent above the PLR or the prime lending rate.

Performance Bank guarantees

One of the major reasons why people sign unified license agreement for the VNO is the lack of infrastructure. When there is lack of infrastructure, there is lack of accountability related performance.

As you’re not guaranteeing any performance, you have to requirement to file the performance bank guarantee. Therefore, for the VNO unified license by DOT doesn’t require the payment of performance bank guarantee.

Financial Bank Guarantee

You’re required to pay the Financial bank guarantee and submit the proof associated with it to the Department of DOT upon receiving the letter of intent. It’s an important part of the VNO license online apply paradigm. Different VNO categories have different financial bank guarantee requirements. There is also a difference in ISP License and VNO License You can know about them by reading our explanation of VNO license fee structure.

Account preparation

As an VNO license holder, you’re required to prepare a record for every service you’re authorized for under the scope of that license. These include:

  1. Compilation and maintenance of accounting record. It should have enough information about the transaction in each quarter.
  2. Compilation of all accounting statements created as per the direction of Department of Telecommunication.
  3. DoT certified statement sworn on an affidavit.
  4. Details of the inter-operator settlement.

 Conclusion

When applying for VNO license, you should always read the fine print. It’s reading that assures that your business goes beyond just getting the license. It helps you keep your business steady as well.

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