How to Start your own ISP Company in India !

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Starting an ISP is not as complicated as many think, but expanding the same and building an ecosystem do need a lot of patience and efforts. Mumbai Convergence Hub is committed to help Indian ISP’s and Networks not only to save 70% of their bandwidth but also to guide  you to kick-start your own ISP.

Before Starting the essential Elements, you need to have your own License to operate. Government of India have introduced Unified License system which provides single License for almost all licensing requirement. You can take Class A ( All India), Class B ( State Wise) or Class C License. Most popular model followed by incumbent Internet service providers with cash shortage is to take a franchisee of existing License providers and then to start the business and then scale up and apply for own ASN and Unified License.

 Irrespective of Shared License as well as Own license, a Network should need the following:

 Dedicated NOC

NOC ( Network Operations Center ) is the most important location for any ISP. This is ideally done by following Data Center design and running model ( Raised Floor, UPS and Generator Backup).

Carrier Neutral Data Centers are ideal choice considering the fact that there is no CAPEX for infrastructure and 24*7 NOC and monitoring is provided on default.

The UPS and diesel power generators are needed when city power is interrupted by a power outage. The HVAC units are needed to keep the data center cool, because the equipment running the ISP’s generates heat which can damage equipment.

 Dedicated Routers and Specialist Network Engineers

Purchase, install and configure enterprise-grade routers, switches and computers. Do not go the cheap route on the equipment or the customers will complain early and often about your ISP’s slow performance. All these equipment forms the backbone of the ISP’s network and concentration should be given to make wise long term decisions. Industry trend says 60% of incumbent ISP’s end up using Microtik Routers if they only have few routes and loads to handle.

 Eg : Cisco Catalyst 6500-E is currently used by Mumbai CH for taking care of internal routing.

Bandwidth Procurement

Most ISP’s use more than 2 upstream providers to ensure speed, connectivity and reliability. You can buy 1:1 Bandwidth from Tata Communications, Reliance Com, Bharti Airtel, Idea Cellular, Vodafone, PowerGrid etc.

Peering In India

Peering helps to save huge amount  of Internet Bandwidth, the best way is to Peer at an Internet exchange and Offload traffic. We are grateful for our customers for making us India’s largest Internet Exchange Hub. Along with us we have NIXI also which is an ideal location for peering in India. Be aware that NIXI do have regional content restrictions and have X-Y commercial pricing in Place. But if you have an ISP license we suggest you to peer at NIXI along with our Hub where you need not have a License and what we require is your AS Number.

Advanced Steps

  • Google Caching Server
    • Google provides it GCC (Caching) server based on multiple criteria, the major one is having a traffic of 1G or more, else based on the location and its traffic. This will help you in Saving Data.
  • Akamai Caching Server
    • Akamai is the global leader in Content Delivery Network (CDN) services, making the Internet fast, reliable and secure for its customers. They  also provides EDGE Servers to customers after analyzing their traffic.
  • Content Caching Servers
    • Peer APP, Extreme Peering, X Cache, TorBox etc are some of the solutions used by ISP industry in India to cache the content and provide an easy access to customers at higher speeds. This helps consumer broadband networks in saving traffic between 10-20% based on the customer profile.

ELIGIBILITY CRITERIA FOR INTERNET SERVICE PROVIDERS APPLICATION FORM AND LICENSE AGREEMENT FINALIZED THREE-TIER LICENSE FOR INTERNET SERVICES

The Department of Telecommunications (DoT) has finalized the standard Application Form and License Agreement for Internet Service Providers (ISPs). This is a follow-up to the announcement of the New Internet Policy Guidelines by the Government in November 1997, based on the report of the committee headed by Dr. Bimal Jalan to give a boost to Internet use in India. The Government had decided to freely permit private operators to provide Internet service.
The licensees will be issued to all eligible applicants on submission of completed applications in a prescribed form. The application forms containing the guidelines, general information and the details of the license agreement will be available on sale at the Headquarters of Telecom Commission, Delhi, and the Telecom Circles outside Delhi, from 18th February, 1998 onward. The broad guidelines and terms and conditions of the ISP license are:

ELIGIBILITY CRITERIA : A company registered in India under the Companies Act, 1956 will be eligible to submit the proposal for providing Internet Service. Foreign equity shall be as per the Government policy and guidelines issued from time to time. At present, the foreign equity is permitted to the extent of 49 per cent. There is no requirement for the applicant-company to have any prior experience in information technology or telecommunication services.

SERVICE AREA : The Internet service areas have been grouped into three categories. Separate licenses would be granted to any company for each service area.

CATEGORY ‘A’ SERVICE AREA : This includes the whole of India.
CATEGORY ‘B’ SERVICE AREA : This consists of each one of the 20 Territorial Telecom Circles and the four Metro Telephone Systems of Delhi, Mumbai, Calcutta and Chennai of the DoT. However, if a license for the Telephone Systems of four major cities of Ahmadabad, Bangalore, Hyderabad and Pune is required, these will also be treated as Category ‘B’ Service Area on a par with the Telecom Circles.
CATEGORY ‘C’ SERVICE AREA : This includes any Secondary Switching Area (SSA) with their geographical boundaries defined by DoT as on 1.4.1997. The SSA’s of each of the four Metro Telephone Systems of Delhi, Mumbai, Calcutta and Chennai and Telephone Systems of four major cities of Ahmadabad, Bangalore, Hyderabad and Pune with their geographical boundaries defined as on 1.4.1997, however, stand excluded from Category ‘C’ as they already form a separate Category ‘B’ Service Area.

PERFORMANCE BANK GUARANTEE (PBG): A performance bank guarantee of Rs.2 Crore for each Category ‘A’ Service Area, Rs.20 Lakh for each Category ‘B’ Service Area and Rs.3 Lakhs for each category ‘C’ Service Area valid for two years from any Scheduled Bank in the prescribed proforma shall be submitted along with the application for each Service Area.

LICENSE  FEE : The license fee shall be waived for a period of  five years up-to 31.3.2003.The license fee to be paid relating to the period starting from 1.4.2003 by the Licensee company will  be intimated on or before 1.4.2001 and shall be payable to the Telecom Authority irrespective of the time of entry of an ISP.

PERIOD OF VALIDITY OF THE LICENSE AND ITS EXTENSION : The license shall be valid for an initial period of ten years unless otherwise terminated. If requested by the Licensee, extension may be granted by the Telecom Authority on suitable terms and conditions for a period of five years or more at a time.

TARIFF : ISP’s will be free to fix their own tariff. The tariff will be left open to be decided by market forces. However, the Telecom Regulatory Authority of India (TRAI) may review and fix a tariff at any time during the validity of the license which shall be binding on the Licensee.

NUMBER OF LICENSES FOR ISP’s: Applicants will be required to submit separate application for each Service Area. An applicant company may be granted any number of licenses. There will also be no limit on number of licenses that can be granted in a particular Service Area. The leased-line subscribers of the Service will be from within the Service Area but the dial-up-access subscribers could be located anywhere in the country.

TECHNICAL REQUIREMENTS : The ISP’s will be required to set up their nodes/servers within the geographical limits of the Service Area. They shall use Internet Protocol (IP) and shall meet the technical requirements of the ISP’s (DoT/MTNL/VSNL/other ISP’s) to which they are connected. The equipment used by the private ISP’s shall be in conformity with the Interface/Protocol requirements as applicable.

E-MAIL AND VSAT SERVICE Licensees : Existing E-Mail and VSAT Service Licensees may also obtain separate ISP License for any number of the above mentioned Service Areas subject to the fulfillment of the eligibility criteria and shall implement the service independent of their existing network. An ISP may provide Internet service to any VSAT customer (who could be served by a Licensed VSAT service provider or captive private VSAT network), if the VSAT is located within the Service Area of the ISP.

INTER-CONNECTIVITY : Direct inter connectivity between two separately Licensed ISP’s shall be permitted. International traffic shall flow only through DoT’s Internet Node, i.e. DoT’s Internet Access Services (DIAS) or Videsh Sanchar Nigam Limited (VSNL)’s Internet gateway, i.e. Gateway Internet Access Services (GIAS). The ISPs shall have option to connect their Internet node either to DoT’s node or VSNL’s gateway directly for the purpose of delivery of international traffic.
The Licencee may obtain the transmission links on lease from DoT, Licensed Basic Service Operator or any other operator specially authorized to lease such lines to the ISP’s. The  Licensee may also establish its own transmission links within its Service Area for carrying traffic related to his service only provided that such capacities are not available from any other authorized agencies and subject to the permission Telecom Authority.
Resources required for operation of the services for extending them over to the network of upstream service provider (DoT/VSNL etc.) or any other service provider Licensed by the Authority, including time frame for provision of the same, will be mutually agreed between the parties.

VOICE OVER INTERNET : Voice over Internet is not permitted.

DELIVERY OF THE SERVICE : The Licensee shall be responsible for installation, testing and commissioning of all the equipment to provide the service including connectivity to DoT’s DIAS or VSNL’s GIAS for delivery of Internet traffic. The period of  implementation of the license will be 18 months from the grant of.

OBSCENE MATERIAL AND CYBER LAWS : Flow of obscene, objectionable, unauthorized or any other content infringing copy-rights, intellectual property right and against international and domestic Cyber laws (as and when established ) in any form over the ISP’s network is not permitted.

COST OF APPLICATION FORM AND PROCESSING FEE : A nominal cost of  Rs.1000/- for the Application Form and Rs.5000/- towards processing fee for each application which are non-refundable have been prescribed.
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2 thoughts on “How to Start your own ISP Company in India !”

  1. Dear sir,
    I want to start my own ISP company with my own ISP licence in khandwa(M.P.) how can you help me to start my business
    Please guide me

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