DoT introduces resale of IPLC service

New Delhi: The Department of Telecommunications (DoT) has decided to allow resale of bulk bandwidth in the international private leased circuits (IPLC) segment, in a bid to improve the availability of international bandwidth in India at a lesser cost.

DoT said that the new category of licence for resellers are being permitted with a view to promote competition and affordability in international bandwidth. The move is likely to benefit  industries such as business process outsourcing units, software exporters, call centres and banks  who will be able to buy bandwidth from the resellers at much lower costs

Bandwidth resellers buy capacity from large international long distance service providers like VSNL or AT&T and then resell it to consumers. They do not have that their own any infrastructure. Such a move would promote cheaper internet services and international long distance calls.

As per DoT norms only Indian registered companies will be given the licence to become a reseller. The net worth and paid-up capital of company is required to be a minimum of Rs 2.5 crore. Foreign investment in the company must not exceed 74 per cent, as per foreign direct investment (FDI) rules in the telecom sector.

The applicant should have an initial financial bank guarantee of Rs 1 crore. The entry fee has been kept at Rs 1 crore, while DoT will also impose an annual license fee of 6 per cent of the adjusted gross revenue (AGR), or Rs 5 lakh, whichever is higher.