VNO License Fee Structure per the Unified License Agreement

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VNO License Fee Structure per the Unified License Agreement

The Department of Telecommunications issues the Unified License for Virtual Network Operators to provide telecom-related services in the country. To avail of such licenses, you must register the application for a Virtual Network Operator license with the Department of Telecommunications. During the registration, one must observe the eligibility criteria for VNO license registration by the DoT. This article will discuss the capital requirement and license fee structure that a UL VNO license applicant must maintain.

How to invite Foreign Direct Investments in a VNO License company?

FDI Percentage in the VNO Company

The VNO License applicant can access an FDI of upto 100% with 49% under the automatic route. Beyond 49% FDIs, the Licensee must get the fund through the FIPB route subject to observance of licensing and security conditions by the Licensee and investors as notified by the DoT from time to time.

Direct and Indirect FDIs

The unified licensee company must count the direct and indirect Foreign Direct Investment to calculate total FDI. The VNO Licensee, the Indian Promoters, or even the Investment Companies, including their holding companies, must comply with the provisions of the extant FDI policy of the Government. In addition, the Government must consider security concerns while approving the licenses.

FDI Policy 

The incoming FDI must be subjected to the laws of India. They must not be governed by the laws of foreign country/countries. The unified Licensee must comply with the relevant provisions of the FDI policy of the Government.

Equity Structure of the VNO License Company

Equity Structure Declaration

The UL VNO License company must declare the Indian & Foreign equity structure (both direct and indirect) in the Licensee company. They must also submit a compliance report regarding compliance with FDI norms and security conditions.

Compliance Report Submission

The submission must be on the 1st day of January and 1st day of July of every year. The Report must be addressed to the Licensor in Proforma as may be prescribed from time to time.

Report Certification

The VNO licensee must get the Compliance report certified by the Company Secretary or Statutory Auditor. The Report must be countersigned by the duly authorized Director of the Licensee Company.

Shareholding Arrangement in a VNO License Company

A VNO Licensee must ensure that the shareholding changes are subjected to appropriate statutory permissions under the Laws of India. There should be no restriction on the number of VNO licensees per service area. VNOs can have agreements with more than one NSO for all services other than Access and services that need numbering and the customer's unique identity.

Paid-up Capital of a VNO Company

The unified Licensee applicant must have a minimum paid-up equity capital equal to the sum of the Paid-up Equity Capital required for each Service opted by the Licensee. The minimum paid-up equity capital requirement under this License is Rupees Ten Crore only. The Licensee must maintain the required minimum paid-up equity during the currency of the License.

Net worth Requirement for a VNO Company

Net Worth Amount

The Unified Licensee applicant must maintain a minimum Networth equal to the sum of the Networth required for each Service opted by the Licensee. The combined minimum Networth under this License for acquiring the authorization for all the services is Rupees Ten Crore only.

Net Worth Certification

Networth must be as defined in the Companies Act 2013, amended from time to time, and certified by Company Secretary. If the applicant is a legal entity but the Companies Act doesn't cover it, then the License must get the net worth certified by the Chartered Accountant or a Cost Accountant.

Net Worth Composition

The licensee must not count the net worth of promoters or equity holders to determine the company's net worth. While counting the networth, the Licensee must convert the foreign currency into Indian Rupees at the prevailing rate which the RBI indicates as on the date of reception of the application.

Net Worth periodic Declaration

The applicant Licensee must declare paid-up Capital and submit a compliance report on the 1st day of January and 1st day of July of every year to the Licensor. This is to be certified by the Company Secretary or Statutory Auditor and countersigned by the duly authorized Director of the Licensee Company.

Service Extent of the VNO Licensee

The VNO Licensee shall provide only those services for which the Authority has granted the authorization as per the Unified License Agreement. It can be even if the total amount of Entry Fee payable equals the sum total of the following:

• Maximum Limit
• Minimum Requirement of Networth
• Minimum Requirement of Paid-up Equity Capital

The VNO Licensee must meet the eligibility requirements when obtaining additional service authorization during the License currency. For more information on VNO licenses, connect with the Telecom Experts at Registrationwala.

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