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VSAT operators to pay 10 per cent revenue as annual licence fee

BS Economy Bureau

The government on Thursday announced guidelines for Very Small Aperture Terminal service providers for operations in Ku band. While the entry fee for VSAT operators has been fixed at a non-refundable amount of Rs 3 million, the licence fee for commercial VSAT service providers has been pegged at 10 per cent of the revenue per annum, and Rs 16,000 per annum for closed user VSAT operations.

The licence would be granted on a non-exclusive basis for both commercial and captive VSAT service for a period of 20 years, which is extendible by 10 years. As per the earlier policy guidelines, the licence period was for 10 years. The service area for the licence would be the territorial boundaries of India.

The earlier permitted data rate of 64 Kbps has also been increased to 512 Kbps per VSAT, which will facilitate faster data communications. The government has laid stringent conditions for the existing telecom service licence holders.

They have been asked to clear all outstanding dues and complete rollout obligations before the licence is granted. Strict rollout obligations have also been laid, with a minimum of 5 VSATs along with hub to be commissioned within a period of one year. A penalty of Rs 1 million will be imposed per annum for any delays up to two years; thereafter the licence shall be terminated.

The applicant has to be an Indian company registered under the Indian Companies Act, 1956. Total foreign equity in the company shall not exceed 49 per cent at any time during the entire licence period. Investment in the equity of the applicant company by a non-resident Indian or by international funding agencies will be counted towards its foreign equity.

Though inter-connection with PSTN (telephone exchanges) is not permitted, inter-connection for VSAT providers has been permitted between terrestrial data lines such as Internet.

When the licence agreement is signed, a financial bank guarantee for Rs 3 million valid for six months has to be submitted. In addition, a performance bank guarantee of Rs 5 million is to be submitted initially.

The existing VSAT licence holders have been given the option to migrate to the new licence regime but only after clearance of all outstanding dues and withdrawal of litigations against the government.

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