National Long Distance License policy is now liberalized. It reflects the government’s desire to encompass entire Indian geography with affordable and reliable telecom facilities. This article discusses those liberal policies.
The rising demand of telecom facilities in India reflect the opportunities that this sector has presented to the people. Therefore, the government is doing everything in its power to bring policies that make these facilities more accessible, affordable and reliable. One way to do so is to introduce more players in this sector. Thus, the India’s government has taken measures to liberalize the policies of National Long Distance License.
In this article, we are going to discuss in detail every policy that the government has introduced to liberalize the National Long Distance services. Knowing them is a boon for entrepreneurs who’re looking for a window to enter into the telecom sector.
Reducing the entry fee for the NLD License
The government’s primary concern as of now is to promote the NLD service sector by inviting as many players on board as possible. Thus, the Ministry has reduced the entry fee of NLD License from INR 100 Crore to INR 2.5 Crore. Going one step further and paving the way for ease of operations, it has reduced the License fee from 15% of adjusted gross revenue to merely 6% of the same.
What it means for the entrepreneurs?
Those with slightly more than modest financial status can now enter the National Long Distance domain to provide data and voice services within the national borders.
Removing the need of point of presence
For the current holders of NLD license, it’s imperative to have a mandatory provision of setting up a Point of Presence for each long distance charging area. However, the government of India has removed this restrictions. Therefore, all the future NLD licensees will be exempt from following this obligation.
What does it mean for the aspirants of NLD license?
Having a point of presence in an area has always been a technologically intensive and a costly affair. Additionally, it’s a bane to the flexibility of service providing. Therefore, this move has paved the way for aspirants of NLD license to provide their services in a more flexible manner.
Reducing the net-worth and paid up capital requirement
The current paid-up capital requirement and net-worth requirement for the NLD licensees are INR 250 Crore and INR 2500 Crores respectively.
It halted the introduction of new players as meeting this mountainous monetary requirement is not something that could be done by everyone. In response, DOT made a decision to cut down these requirements to INR 2.5 Crore only. Read More: ILD License
What does this mean for the aspiring National Long Distance Service providers?
Now that the centre has cut down the net-worth requirement by 100 times, budding tech-oriented entrepreneurs with access to funding methods such as bootstrapping and small term loans have a chance to enter in to the NLD arena.
Allowing the access to subscribers directly
The Department of telecommunication doesn’t give the right to the current NLD to directly access the subscribers for provision of leased circuits/closed user groups.
However, we live in a liberated era now as with the intention to promote BPO and KPO industries, government has removed such boundaries. Now, it’s possible for an NLD service provider to directly access the subscriber so that they can provide it last mile connectivity.
What does it mean to the future licensees?
NLD Long Distance Operator has always been working in the backend – providing all the requisite services with outdated technology. However, with the direct access to their subscribers, they can now come to the front and aid them with last mile connectivity.
From reducing the capital requirement to cutting down the entry fees by 40 times, the government has surely making moves to ensure that more and more players are introduced to the telecom sector.
Considering that the current telecom sector is plagued with duopoly, this move, along with current moratorium on AGR dues, can assist the entrepreneurs to come forward without the fear of being running out of money to actually provide the services they obtained the license for.