GOVERNMENT OF INDIA
MINISTRY OF COMMUNICATIONS
DEPARTMENT OF TELECOM.
(BS CELL)
SANCHAR BHAVAN, 20 ASHOKA ROAD, NEW DELHI-110 001.

GUIDELINES FOR ISSUE OF LICENCE FOR NATIONAL LONG DISTANCE SERVICE

The New Telecom Policy’99 envisaged the opening up of the National long distance service beyond the service area to the private operators. The Government has decided to open the National Long Distance Service without any restriction on the number of operators. Following are the broad guidelines for issue of Licence for National Long Distance Operations (NLDO) in India:

1. The applicant must be an Indian company, registered under the Companies Act’1956.
2. The applicant company shall submit the application in the prescribed Application form.
3. The applicant company can apply only for one licence for NLDO.
4. The licence for NLDO shall be issued on non-exclusive basis, for a period of 20 years, extendable by 10 years at one time, for inter-circle Long Distance operations within the territorial jurisdiction of India.
5. The total foreign equity in the applicant company must not exceed 49% at any time during the entire licence period. Investment in the equity of the applicant company by an NRI / OCB / International funding agencies will be counted towards its foreign equity. In this regard the applicant company shall submit a certificate from the competent authority to the effect that total foreign equity in the applicant company does not exceed 49%.
6. The applicant company shall submit, along with the application, the Roll Out plan indicating the names of Long Distance Charging Areas (LDCAs) in each telecom circle for coverage in four phases including the coverage of uneconomic and remote areas described in Annexure-III. The list of telecom circles, and LDCAs are given in Annex-I and II respectively.
7. The applicant company shall pay one time Entry Fee of Rs 100 crores before the signing of the Licence in the form of Demand Draft/Pay Order payable at New Delhi in favour of Pay & Accounts Officer (Headquarter), Department of Telecom and shall be non-refundable. In addition thereto, four Bank Guarantees (BG) of Rs. 100 crores each shall be given which will be released back on completion of each phase in the manner described below subject to fulfilling the network Roll out obligations by establishing Point of Presence in LDCAs as specified in Annex-IV:
1. Completion of Phase I Rs.100 Crores
2. Completion of Phase II Rs.100 Crores
3. Completion of Phase III Rs.100 Crores
4. Completion of Phase IV Rs.100 Crores
8. Any shortfall below the percentage of network coverage - Phase I, II , III & IV will result in encashment & forfeiture of the particular BG relatable to that phase. There will be no carry forward of the unfulfilled network obligation from one phase to another.
9. The applicant company shall also submit business plan along with its funding arrangement for financing the project.
10. The applicant company shall make its own arrangements for Right of Way (ROW). However, the Central Government will issue necessary notification on request bringing the NLDO licensee for the purposes of placing telegraph lines under Part III of the Indian Telegraph Act’1885. Provided that non-availability of the ROW or delay in getting permission / clearance from any agency shall not be construed or taken as an excuse for non-fulfillment of the Roll-out obligations.
11. The applicant company shall have a minimum paid up equity capital of Rs. 250 Crores on the date of the application and shall submit the best proof thereof along with the application for licence.
12. The promoters of applicant company shall have a combined networth of Rs 2500 crores. The networth of only those promoters shall be counted who have at least 10% equity stake in the total equity of the company. Here networth shall mean as the sum total, in Indian rupees, of paid up equity capital and free reserves. While counting Networth the foreign currency shall be converted into Indian Rupees at the prevalent rate indicated by the Reserve Bank of India on the date of the application.
13. The constituent(s) having at least 30% of total equity in the applicant company must have an experience of telecom sector and the proof thereof shall be attached with the Application for licence.
14. In addition to entry fee described above the licence fee in the form of revenue share @ 10% plus prescribed contributions towards the Universal Service Obligation Fund (USO fund) with a total cap of 15% is payable.
15. Provided further that the fee /royalty for the use of spectrum and possession of wireless telegraphy equipment shall be separately payable as per the details and prescription of Wireless Planning & Coordination Wing. The fee/royalty for the user spectrum /possession of wireless telegraphy equipment depends upon various factors such as frequency, hop and link length, area of operation etc.
16. The applicant company shall submit Financial Bank Guarantee (FBG) of Rs. 20 crores one year after the date of signing the licence agreement or before the commencement of service whichever is earlier in the prescribed Proforma given in the Licence Agreement. Initially, FBG shall be valid for a period of six months and shall be renewed from time to time for such amount as may be directed by the Central Government.
17. The dues/fees/royalties for the use of spectrum/possession of Wireless Telegraphy equipment shall be separately securitised by furnishing FBG of equal amount valid for a period of one year renewable from time to time till final clearance of all such dues.
18. Change in the name of the applicant company or the licensee, as the case may be, shall be permitted in accordance with the provisions under the Companies Act, 1956.
19. The application shall be decided, so far as practicable, within 15 days of the submission of the application and the applicant company shall be informed accordingly. In case the applicant is found to be eligible for grant of licence for NLDO, the applicant shall be required to deposit Entry Fee and submit Bank Guarantees / other documents and sign the licence agreement immediately within a period of three months from the date of issue of the letter failing which it will presumed that the applicant is no longer interested and the application will stand rejected.
20. In case the applicant is found to be not eligible for the grant of licence for NLDO, the applicant shall be informed accordingly, whereafter he can file a fresh application removing the deficiencies.
21. The NLD Service refers to the carriage of switched bearer telecommunications service over a long distance and NLDO licencee will have a right to carry inter circle traffic excluding intra -circle traffic except where such carriage is with mutual agreement with fixed service provider in accordance with their mutually agreed terms. NLDOs can make mutually agreed arrangements with FSPs for picking up the traffic for the leg between Long Distance Charging Centre (LDCC) and Short Distance Charging Centres (SDCCs).
22. NLDO shall be required to make own suitable arrangements / agreements for leased lines with the Access Providers for last mile.
23. Licences will be issued without any restriction on the number of entrants for NLD service.
24. Interconnection between the networks of different service providers shall be as per national standards of CCS No.7 issued from time to time by Telecom Engineering Center (TEC).
25. The NLDO Licensee may enter into suitable arrangements with other service providers to negotiate Interconnection Agreements whereby the interconnected networks will provide the following :
1. To connect, and keep connected, to their Applicable Systems,
2. To establish and maintain such one or more Points of Interconnect as are reasonably required and are of sufficient capacity and in sufficient numbers to enable transmission and reception of the messages by means of the Applicable Systems,
3. To meet all reasonable demand for the transmission and reception of messages between the interconnected systems.
26. The terms and conditions of interconnection including standard interfaces, points of interconnection and technical aspects will be such as mutually agreed between the service providers.
27. The NLDO Licensee shall for the purpose of providing the service install own equipment so as to be compatible with other service/ Access providers’ equipment to which the NLDO licensee’s Applicable Systems are intended for interconnection.
28. The NLDO Licensee shall comply with any direction on interconnection regulations issued by the TRAI under TRAI Act, 1997.
29. The NLDO Licensee shall operate and maintain the licensed Network conforming to Quality of Service standards to be mutually agreed between the service providers in respect of Network-Network Interface.
30. The charges for access or interconnection with other networks shall be based on mutual agreements between the service providers subject to the restrictions issued from time to time by TRAI under TRAI Act, 1997.
31. The network resources including the cost of upgrading / modifying interconnecting networks to meet the service requirements of National Long Distance service will be per mutually negotiated sharing arrangements between the service providers.
32. It shall be mandatory for fixed service providers, cellular mobile service providers, cable service providers, to provide interconnection to NLD service providers whereby the subscribers could have a free choice to make inter-circle/international long distance calls through NLD service provider.
33. The applicant company shall pay a processing fee along with the application of Rs. 15,000/- in the form of Demand Draft/Pay Order payable at New Delhi in the name of Pay & Accounts Officer (Headquarter) DOT and the same shall not be refunded for any reason whatsoever.
34. The detailed terms and conditions applicable to the licence for NLDO are given in the draft Licence Agreement.
35. The application is to be submitted to the Section Officer , BS-I, Department of Telecommunications, Room No.1119, Sanchar Bhavan, , 20 Ashok Road, New Delhi-110 001.

GOVERNMENT OF INDIA
MINISTRY OF COMMUNICATIONS
DEPARTMENT OF TELECOM.
(BS CELL)
SANCHAR BHAVAN, 20 ASHOKA ROAD, NEW DELHI-110 001.

APPLICATION FOR LICENCE FOR OPERATION
OF
NATIONAL LONG DISTANCE (NLD) SERVICE

1. Name of the Applicant Company : _________________________________

2. Complete postal address with

        Telephone/FAX Nos./E-mail

i) Corporate Office     _____________________________

                             _____________________________

ii) Registered Office   _____________________________

4. Name of Authorised contact person,
        his designation and Telephone/FAX ______________________________

                                        Nos./E-mail ______________________________

5. Details of payment of processing fee

        (Demand Draft/Pay Order to be enclosed in a separate envelop)

6. Proof of Registration

        (Certified copy of Certificate of
        Registration duly certified by the Registrar
        of Companies to be enclosed)

7. Promoters / Partners in the Company :
        (details of equity holding)

        S.No. Name of Promoter / Indian/ Equity Networth    Partner Foreign % age.

        ----- --------------------- ------------ ------------- --------------

        ----- --------------------- ------------ ------------- --------------

        ----- --------------------- ------------ ------------- --------------

(Total foreign equity participation(s), if any, upto the extent of 49%, including NRI equity, both repatriable and non-repatriable, is allowed. Complete break-up of 100% of equity must be given).

8. Paid up capital

        (Proof to be attached)

9. Certified copy of Agreement between the

        Indian company and foreign partner(s),

        If applicable. (Please enclose as Annexure-III).

10. Certified copy of approval of Government of

        India for terms of Foreign Collaboration or copy
        of application submitted to SIA/Government in
        this regard with proof of submission.

11. Income Tax Clearance Certificate for last two years.

12. List out experience in telecom sector of Promoters / Partners :

        S.No. Name of Promoter / Partner Experience

13. Network Rollout Plan

        Year % of total LDCA proposed % coverage of uneconomic / Remote
        to be covered Remote area LDCAs

2^nd _______________________ _____________________________

3^rd _______________________ _____________________________

4^th _______________________ _____________________________

5^th _______________________ _____________________________

6^th _______________________ _____________________________

7^th _______________________ _____________________________

(Name of circlewise LDCA proposed to be covered to be enclosed).

14. Details of business plan along with the funding arrangement for financing the
        project.

15. Resolution of Board of Directors /
        other proof that the person signing the application
        is authorized signatory
        (Enclosed as Annexure-IV).

Certificates :

1. I hereby certify that I have carefully read the guidelines on National Long Distance Service and I undertake to fully comply with the terms and conditions therein.
2. I understand that this application if found incomplete in any respect or found with conditional compliance or not accompanied with the processing fee shall be summarily rejected.
3. I understand that processing fee is non-refundable irrespective of any reason whatsoever.
4. I undertake to sign the Licence Agreement within the time notified failing which my application shall be taken as . rejected.
5. I understand that all matters relating to the application will be subject to jurisdiction of courts in Delhi / New Delhi only.
6. I understand that if at any time any averments made or information furnished for obtaining the licence is found to be incorrect then my application and the licence if granted thereto on the basis of such application shall be cancelled.

Date                                                                              Signature and name of the

Place                                                                                  Authorised Signatory

                                                                                            (Company’s seal)

Annex-I

TELECOM CIRCLES AND THE AREAS COVERED BY THEM FOR
THE PURPOSE OF THIS LICENCE

Contd…2/-

 :-2-:

LIST OF LONG DISTANCE CHARGING AREAS

LIST OF REMOTE/UNECONOMIC AREAS (LDCAs)

MINIMUM NETWORK ROLL OUT OBLIGATIONS FOR NATIONAL LONG DISTANCE OPERATORS FOR ESTABLISHING POINT OF PRESENCE

Point of Presence (POP): Setting up of switching center and transmission center of appropriate capacity by NLDO at the LDCC level to provide on demand inter-circle long distance services of prescribed quality and grade of service in a non-discriminatory manner.

Government of India

Ministry of Communications & Information Technology,

Department of Telecommunications

(Basic Services Licensing Group)

Sanchar Bhavan, 20 Ashok Road, New Delhi-110 001

No.10-25/2001-BS.I(Vol.IV)                                                                       Dated, the       18th June, 2004.

Memorandum

To

     All National Long Distance Service Providers

Sub: Amendment to Para 7 of the Guidelines for issue of Licence for National Long Distance Service.

The undersigned is directed to convey the approval of the competent authority for amendment of Para 7 of the Guidelines for issue of Licence for National Long Distance Service. The amended clause may be read as under:

( Sukhbir Singh)

Director (BS.III)

Copy to:

1.       Secretary, TRAI, New Delhi.

2.       DDG (LF), DOT