An International Long Distance license or an ILD License is the legal permit provided by the Department of Telecommunications (DoT) that authorizes the foreign network service providers to establish International Long Distance connectivity with our homegrown networks. It aims to provide sustainable and efficient global network connectivity. This ILD license helps our UL (Unified License) network license holders go beyond their usual business and add international connectivity services to their domain.
Some of the guidelines set forth by the Department of Telecommunication have been discuss below in detail. Read the article to get clarity regarding the National Long Distance License and observe all the regulations put forth by the DoT.
DoT issued guidelines for International Long Distance license
Company Registration:
- The applicant must be an Indian company register under the Companies Act of 1956.
- Applicant company shall apply in the prescribe application format.
- The applicant company can apply for only one International Long Distance license.
Foreign investments:
The total composite foreign holding includes the investments by
- Foreign Institutional Investors (FIIs),
- Non-resident Indians (NRIs),
- Foreign Currency Convertible Bonds (FCCBs),
- American Depository Receipts (ADRs),
- Global Depository Receipts (GDRs),
- Convertible preference shares,
- Proportionate foreign investment by Indian promoters or the investment companies, including their holding companies.
Executive Board for the proposed ILD license holder company:
- The top executives of the applicant company’s Board, like the Chairman, Managing Director, and Chief Executive Officer (CEO), shall all be resident Indian citizens.
- The Share Holder Agreements (SHA) shall specifically incorporate the condition that the majority of Board members shall be resident Indian citizens. They must also adhere to the conditions set forth by the International Long Distance Licence Agreement.
- The appointment to these executive positions must be consulted with the serious Indian investors of the applicant company.
Foreign Direct Investments:
- The maximum allowed FDI investment to the applicant company must be up to 49 percent which will continue to be on the automatic route.
- The applicant company shall require Foreign Investment Promotion Board (FIPB) approval for FDI, including their holding companies if it has a bearing on the overall ceiling of 74 percent.
- The investment flowing into the applicant company must be checked and approved by the FIPB, and the FIPB must ensure that the investment is not coming from unfriendly countries.
- The investment approval by FIPB must be in adherence to the license Agreement.
- FDIs are subject to the laws of India, not the foreign country(s) laws.
Detailed Roll-out plan:
The applicant company must submit a detailed network Roll Out plan which stipulates receipt and delivery of traffic from/to all the exchanges in the country.
International Long Distance Licensing fee:
- The applicant company shall pay a one-time non-refundable Entry Fee of Rs 2.5 crores before signing the Licence in the form of Demand Draft/Pay Order payable at New Delhi in favor of Pay & Accounts Officer (Headquarter), Department of Telecommunications, New Delhi.
- Unconditional Bank Guarantee (UBG) of Rs. 2.50 crores shall be give, which will be release to fulfill the roll-out obligations.
Right of Way (RoW):
- The applicant company shall make its arrangements for Right of Way (RoW).
- Non-availability of the RoW or delay in getting permission/clearance from any agency shall not be construe or take as an excuse for non-fulfillment of the Roll-out obligations.
Net-worth & Paid-up capital requirement:
The applicant company shall maintain a net worth as well as paid-up capital of
- Rs 2.5 crores on the date of application.
- The company must submit the required certificate to support its claim certified by a Company Secretary or a Company’s statutory auditor.
- The net worth comprises the paid-up equity capital and free reserves.
- The net worth must be compute in Indian rupees.
- The company’s net worth shall not include the net worth of promoters for this purpose.
- The minimum net worth & paid-up capital must be maintained.
Validity of International Long Distance license:
- The International Long Distance Service shall be issued with a validity, on a non-exclusive basis, for 20 years.
- An automatic extension of the license by a period of 5 years is allowed if the applicant has performed satisfactorily under the terms & conditions of the license, including the Quality of Service (QoS) parameters.
Conclusion
Here, we have discussed some of the DoT’s regulations. Guidelines for the companies desirous of applying for the International Long Distance services license. One must strictly observe this adherence for the successful submission of their license registration application. For more regulations, you can look for the subsequent articles posted on our website Registrationwala. Read More: Why is getting the National Long Distance License the need of the hour?
