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Monetary requirements for UL VNO License Registration

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Suppose you, as a Telecom Company, want a Unified License for a Virtual Network Operator (UL VNO license) for your Firm. In such cases, you must observe the rules and regulations of the Ministry of Telecommunications. Therefore, this article discusses some of the monetary guidelines issued by the Department of Telecommunications for you to adhere to.

FDIs in a UL VNO License Company

FDI Percentage

The DoT allows every VNO license holder to accept FDIs upto 100%. But 49% of the FDIs must be through the automatic route. Beyond 49% FDI, the Authorityallows it only through the FIPB route. Such investments are subject to observance of VNO licensing as well as the security conditions by the Unified License holders as well as investors.

Direct/Indirect FDIs

The applicant must count both the direct and indirect Foreign Direct Investments (FDIs) in the Unified License Company to calculate the total FDI. The VNO Investment Companies, including their holding companies, must comply with the provisions of the FDI policy. While approving the FDI investment proposals, the Government can consider security concerns.

FDI laws in India

FDI must be subject to Indian laws and not foreign countries laws. The UL VNO Licensee must comply with every relevant provision of the FDI policy. The Licensee must issue modifications to the policy from time to time. Also, the words such as FDI, foreign equity, investment companies, FIPB, etc., must have the literal meaning defined by the DIPP (Department of Investment & Industrial Policy) in India’s FDI Policy.

Also Read: How to start ISP business in India

Equity Capital

Every VNO Licensee must declare the Indian as well as its Foreign equity structure (both direct and indirect) in the Company. They must also submit a compliance report regarding compliance within the FDI norms/security conditions. The Telecom Licensor must make the declarations half-yearly on the first day of January and the first day of July of every year.

The company secretary or the statutory auditor must certify the Company’s equity structure countersigned by the duly authorized Company’s Director.

Shareholding Arrangement

Every VNO License holder must ensure that shareholding changes must be subject to all statutory permissions under Indian laws. The DoT put no restriction on the number of VNO license holders per service area.

VNO License-NSO Connection

The Telecom Authority allows the VNOs to have UL agreements with more than one NSO for all services. The only exception is the Access service. Such telecom services need the numbering as well as the unique identity of the customer. For wireline access services by EPABX, the connectivity of NSOs at different EPABX is allowed. However, connectivity for more NSOs at a particular EPABX is not allowed.

Restriction on Equity Cross-Holding

In UL-VNO, the provision for restriction of equity cross-holding is applicable between a VNO and another NSO, other than VNO’s parent NSO and between a VNO & another VNO authorized to provide access services using the access spectrum of given NSO(s) in the exact service location.

Also Read: CDSCO Guidelines issued for Cosmetic Import and Manufacture

Change in the name of the VNO License Company

The VNO License aspirant can change the name of its Telecom Company, as per the Indian Companies Act of 2013, upon intimation to the Telecom Licensor. The VNO Licensee must also submit a certified copy of the name change certificate. The submission must be within 30 days from the date of issue to the RoC (Registrar of Companies).

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