ISP license norms amended to permit VPN services

NEW DELHI: The department of telecommunications today, decided to extend the scope of the licence conditions of Internet Service Providers (ISP), thereby allowing them to provide managed Virtual Private Network services to corporates and individuals.

In accordance with the decision, the ISP licences (both licences without Internet telephony and with Internet telephony) will have an enabling provision for VPN services by ISPs under specified terms and conditions, according to a statement put out by the telecom ministry today.

The annual licence fee will be at 8 per cent of the gross revenue generated under the licence. The ISPs would be charged one-time non-refundable entry fee of Rs 100 million, RS 20 million and 10 million for category A, B, and C, respectively. ISP-with-VPN licensee will be permitted to lay optical fibre cable or use radio links for provision of the services in its service area.

Further, ISPs shall be free to enter into mutually agreed commercial agreement with infrastructure service providers for sharing of infrastructure. The ISPs, however, shall not engage in reselling bandwidth directly or indirectly.

According to the government, this decision will help as many 388 licensed ISPs, more particularly 61 all-India (category A) ISP licensees, to offer VPN services to their customers, thus adding to their revenue stream from Internet Access Services.

VPN is a service where a customer perceives to have been provided with a private network, which actually is configured over a shared public network. Benefits of VPN include secure communication over public network and guaranteed quality of service.

A high-level DoT committee had examined the matter and had observed that while on one hand such VPN services were not under the scope of the present ISP licences, on the other hand it would be desirable to permit ISPs to provide such services in the present day liberalised telecom environment in the country.

The services, which are technologically possible, should be allowed, while at the same time ensuring level playing field to all the service providers. Such VPN services that provide a platform for utilisation of bandwidth in a very cost effective and efficient manner are emerging services internationally. This facility is necessary for the corporate world in meeting their growing communication needs of inter-office connectivity to send/transfer data securely and such services are widely available in telecom sector globally.

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