The Department of Telecommunications issues the Unified License for Virtual Network Operators for providing telecom-related services in the country. To avail of such licenses, you must register the application for a UL VNO license with the Department of Telecommunications. During the registration, one must observe the eligibility criteria for UL VNO license registration put forth by the DoT. This article will discuss the capital requirement and license fee structure that a UL-VNO license applicant must maintain.
Foreign Assistance to Virtual Network
The VNO License applicant is allowed an FDI of up to 100% with 49% under the automatic route. Beyond 49% FDIs, the VNO applicant can bring 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.
Total FDI: Direct + Indirect
The UL VNO license company must count the direct and indirect Foreign Direct Investment to calculate total FDI. The VNO Licensee Company, the Indian Promoters as well as 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.
Government’s 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.
UL VNO Equity Structure
The VNO Licensee company must declare the Indian as well as the Foreign equity structure (both direct and indirect) in the Licensee company and submit a compliance report regarding the compliance with FDI norms and security conditions on the 1st day of January and 1st day of July of every year to the Licensor in Proforma as may be prescribed from time to time. This is to be certified by the Company Secretary or Statutory Auditor, countersigned by the duly authorized Director of the Licensee Company.
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Shareholding Behaviour of the Company
An applicant VNO Licensee must subject any shareholding changes to applicable statutory permissions under the Laws of India. There would 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 such services that need numbering and the customer’s unique identity.
UL VNO License: Paid-up Equity Capital
The UL VNO applicant must also have a minimum paid-up equity capital which will be 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 Owned Funds by the UL VNO License Company
The Unified Licensee applicant must maintain a minimum Networth equal to the sum of the Networth required for each Service opted by the Licensee.
NOF Amount
The combined minimum Networth under this License for acquiring the authorization for all the services is Rupees Ten Crore only.
Networth 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 that the Companies Act does not cover, then the Chartered Accountant or Cost Accountant must certify the net worth.
Networth Determination
The VNO applicant must not count the net worth of promoters as well as equity holders to determine the company’s net worth. While counting the net worth, the applicant must convert the foreign currency into Indian Rupees. The applicant must convert the currency at the prevalent rate. The RBI prescribes the rate as indicated as of the date of application reception.
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Networth Declaration
The applicant Licensee must declare paid-up Capital and also 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.
