The new Internet Service authorisation, the real fees, the network you must build and the order to do it in.
Updated 28 September 2026 · 12 min read
Starting an ISP in India is now cheaper and simpler on paper than it was a year ago, because the licence system changed. This guide explains the new route, the real costs, the network you must build, and the order to do things in.
What changed in June 2026. The old Unified Licence ISP categories A, B and C are gone. Under the Telecommunications Act, 2023, DoT notified the Telecommunications (Authorisation for Provision of Principal Telecommunication Services) Rules, 2026 (G.S.R. 513(E), 23 June 2026). You now apply for an Internet Service authorisation on the DoT authorisation portal, which opened on 25 June 2026. Existing licensees migrate by choice; they are not moved automatically.
NSO (Network Service Operator) owns and runs the network. VNO (Virtual Network Operator) rides on a parent NSO's network and sells service under its own brand. Then pick the service area: one telecom circle or metro, or national. Most local and regional ISPs start with a single circle.
Only companies can apply, and a One Person Company is excluded. Foreign investment must follow current FDI policy. You need no pending government dues and a clean management record. A majority of directors must be Indian citizens, and key security roles (network security chief, system administrators, nodal officers) must be resident Indian citizens.
Figures below follow Schedule A and Schedule C of the 2026 Rules. Confirm every amount against the Gazette notification and the DoT portal before you pay, because the Gazette text is the controlling source.
| Type | Area | Min. equity | Processing fee | Entry fee | Initial guarantee |
|---|---|---|---|---|---|
| NSO | Circle / metro | ₹1 lakh | ₹10,000 | ₹50,000 | ₹20,000 |
| NSO | National | ₹10 lakh | ₹10,000 | ₹10 lakh | ₹4 lakh |
| VNO | Circle / metro | ₹1 lakh | ₹10,000 | ₹50,000 | ₹10,000 |
| VNO | National | ₹10 lakh | ₹10,000 | ₹10 lakh | ₹1 lakh |
Net worth is nil for internet service. The old category C entry fee was ₹2 lakh for a circle; the new circle NSO entry fee is ₹50,000. North East and Jammu & Kashmir get concessions on some authorisations.
You pay 8% of adjusted gross revenue (AGR), of which five-eighths goes to Digital Bharat Nidhi. From year two the fee is the higher of 8% of AGR or 30% of your entry fee. Payments are quarterly, with an audited revenue statement due by 30 June each year. Late payment attracts interest at the SBI one-year MCLR plus 2%. If you also sell TV, ask your accountant how the Rules treat that revenue in AGR before you price bundles.
The rules make lawful interception facilities, subscriber identification, and business-connection due diligence mandatory. Premises of business customers are inspected before activation. Keep subscriber KYC complete, retain logs as CERT-In and DoT require, and use trusted equipment sources where required. Point-of-sale agents must be registered and verified.
Before your first customer: a billing system with GST invoices, a RADIUS-linked subscriber database, a ticketing and support process, a network monitoring system with alerting, and a field team for installation. Follow TRAI's broadband quality-of-service rules and publish a complaint channel.
Cover one neighbourhood or a few housing societies. Sign 300 to 500 subscribers before you expand the network. Track churn, tickets per 100 users and installation time. Fix operations before you add capital.
Once the base is stable, bundle managed Wi-Fi, static IPs, leased lines for businesses, and IPTV. If you hold an internet authorisation, it can also be the base for IPTV under the current route. Our IPTV guide covers that path.
Government fees for a single-circle NSO are small: about ₹50,000 entry fee, ₹20,000 guarantee and ₹10,000 processing. The real cost is the network. Core equipment, redundant transit, fibre and installation, a billing stack and working capital usually dwarf the fees. Costs depend on area, density and whether you lease or build fibre; get quotes for your specific town before you commit.
We have taken an ISP customer from licence application to a complete network. Tell us your area and plan.