From License
to Authorisation

All Insights

The Rules are detailed, running to nine chapters and three Schedules. This guide walks through what they actually say: the five authorisation types, who qualifies and at what cost, the new financial regime, the technical, security and satellite conditions that come attached, and how the whole framework compares to the Unified License it replaces.

What Actually Changed

The Telecommunications Act, 2023 envisaged replacement of the old patchwork of licenses with a single concept: an authorisation regime to be governed by the Rules made under the Act. Instead of applying for a license, which is entered into by signing a license agreement after issuance of a letter of intent, an applicant will now seek a non-exclusive authorisation through a portal-based application and letter-of-intent process. These 2026 Rules are therefore the operating manual for that shift. They govern fresh authorisations under section 3(1) and the migration of existing licensees under section 3(6), and they sit alongside the TRAI Act, 1997 and its regulations, which continue to apply to every newly authorised entity.

The headline design choices are worth stating plainly. Authorisations are non-exclusive. They are granted for a maximum of 20 years and are subject to renewal, revocation, curtailment and surrender. And the whole process is digital by default, run through one or more notified portals.

The Five Authorisation Types

Rule 4 sets out five principal authorisations. Each can be granted to a Network Service Operator (NSO), which owns and runs the network and provides the service, or to a Virtual Network Operator (VNO), which rides on a parent NSO's network for providing the relevant services.

Who Qualifies, and at What Threshold

Under Rule 5 and Schedule C, the applicant must be a company (a One Person Company is excluded), with FDI conforming to extant policy, no pending dues, and a sound management track record. Where an entity holds or seeks multiple authorisations, the minimum equity and net-worth thresholds are additive. The thresholds scale sharply with scope: a national unified authorisation sits at the top, while a single-circle internet authorisation is deliberately light.

The Financial Regime

Chapter IV is where most operators will feel the Rules first. The core numbers:

• Authorisation fee: 8% of adjusted gross revenue (AGR). From the second year, the fee is the higher of 8% of AGR or 30% of the applicable entry fee, with corresponding minimum-fee rules for renewal and migration.
• Digital Bharat Nidhi (DBN): five-eighths of the authorisation fee is attributable to the DBN, the successor to the Universal Service Obligation Fund. The fee rate or the DBN component may be varied during the authorisation period.
• Presumptive AGR: for entities holding the right to use access spectrum, presumptive AGR equals 5% of the amount payable for that right (cumulated where spectrum is acquired at different times), with the 8% authorisation fee applied to a presumptive AGR floor where relevant.
• Payment cadence: quarterly. The first three quarters are due within 15 days of quarter-end; the final quarter is paid in advance by 25 March and reconciled by 15 April. The annual audited revenue statement is due by 30 June.
• Interest on delay: the SBI one-year MCLR as on 1 April of the financial year, plus 2%, compounded annually. Part of a month counts as a full month.
• Guarantees: a bank guarantee, an IRDAI-regulated performance bond, or a non-interest-bearing cash deposit, with amounts subject to review.
• Assessment window: generally four years from the end of the financial year, extendable to six where the unassessed amount is likely to be ₹50 lakh or more. Dues are recoverable as arrears of land revenue.

Entry Fees and Initial Guarantees (Schedule A)

Schedule A fixes the up-front cost of each authorisation: a small processing fee, a one-time entry fee, and an initial financial guarantee. Note the deliberate concessions for the North East and Jammu and Kashmir (NE and J&K). The Gazette Schedule A remains the controlling source for every value.

Concessional entry fees apply for the North East and J&K, for example ₹25 lakh in place of ₹50 lakh for NSO circle access, and ₹6.25 lakh in place of ₹12.5 lakh for VNO circle access.

How It Compares to the Old Unified License

To see what the 2026 Rules really change, it helps to set them beside the regime they replace. The Unified License (UL) and Unified License (VNO) were bilateral agreements signed between the Department of Telecommunications and each licensee under the Indian Telegraph Act, 1885. The new Rules abolish that model: there is no agreement to sign. An applicant applies on a portal, receives a Letter of Intent, and the Central Government grants the authorisation unilaterally under section 3(1) of the Telecommunications Act, 2023. In the new vocabulary, a "license" becomes an "authorisation", a "licensee" becomes a "new authorised entity", and the "Licensor" becomes the "Central Government".

Thirteen categories become five

The most visible change is consolidation. The old Unified License carried roughly 13 service authorisations: Access; ISP A, B and C; NLD; ILD; GMPCS; PMRTS; VSAT CUG; Audio Conferencing, Audiotex and Voicemail; and M2M A, B and C. The 2026 Rules fold these into the five authorisations set out above. National and international long distance merge into a single long distance authorisation; the ISP C is dropped; GMPCS, VSAT CUG and PMRTS move into the new satellite chapter or fall away as standalone categories; the separate M2M tiers go; and a new wireline access authorisation is reserved exclusively for VNOs.

The Cost of Entry, Old Versus New

The 8% of AGR fee and its 5% universal-service component both survive, with the universal-service levy renamed the Digital Bharat Nidhi. But several headline numbers move, and almost all of them move downward, except for the minimum presumptive AGR. The table below sets the NSO entry fees and guarantees side by side.

New-regime figures are from Schedule A to the 2026 Rules. Old-regime figures reflect the Unified License and UL-VNO agreements; those agreements remain the controlling source for the earlier values.

The pattern repeats, and is sharper, for VNOs: the unified entry fee falls from ₹7.5 crore to ₹3 crore, access from ₹50 lakh to ₹12.5 lakh, and long distance from ₹2.5 crore to ₹25 lakh, while equity and net-worth thresholds are largely retained. Two structural shifts sit underneath the numbers. From the second year, the authorisation fee carries a floor of 30% of the applicable entry fee, which bites hardest in low-revenue circles. And the old dual-guarantee model, a performance bank guarantee plus a financial bank guarantee, collapses into a single initial guarantee per authorisation.

What Changed Beneath the Fees

• Spectrum stays separate, as it already was. Spectrum has been delinked from licensing in India since 2012, so even under the Unified License an operator acquired spectrum separately by auction, not as part of the license. The 2026 Rules continue and codify this: an authorisation confers no right to spectrum, which is assigned separately under the Act. The change is mainly one of drafting: the spectrum-charge and deferred-payment machinery no longer sits inside the instrument. The old AGR-linked spectrum usage charge, in any case, was abolished for spectrum won in auctions from 2022 onward, so it no longer applies to new spectrum.
• A dedicated satellite chapter. Chapter VII creates a single permission regime for satellite networks, absorbing the old GMPCS and VSAT CUG categories and adding the gateway-in-India, no-mirroring and registration conditions described earlier.
• Data localisation is tighter. The new Rules require all network data, logs and information to be stored in India with no copies routed abroad, add subscriber-data localisation, and bar domestic traffic from leaving the country. Trusted-source and trusted-product conditions, which entered the old license only through a 2021 security amendment, are now codified in the base Rules.
• A core-network competition safeguard. Sharing of core network elements now needs prior approval and must leave at least two core networks per service area.
• Enforcement runs through the Act. Penalties flow through section 32 of the Telecommunications Act, 2023 (graded civil penalties under its Second Schedule, with an opportunity to be heard) rather than the old liquidated-damages clause, and orders take effect on the 61st day from portal publication.
• Longer VNO term. The maximum term for a VNO rises from 10 years to 20, bringing it in line with NSOs, and authorisations remain renewable.

What Has Stayed the Same

• The maximum 20-year term.
• The 8% of AGR fee with a 5% universal-service component, now the Digital Bharat Nidhi.
• Company-only eligibility, and 100% FDI in substance, now governed by the FDI policy rather than hard-coded into the instrument.
• The same 22 telecom-circle and metro service areas (Schedule B).
• The Network Service Operator and Virtual Network Operator distinction.
• The broad equity and net-worth thresholds for the unified categories: ₹25 crore for an NSO, ₹10 crore for a VNO.

A Note on Migration

Existing UL and UL-VNO holders are not moved automatically. They continue under their current agreements until they choose to migrate their terms to the new framework under section 3(6) of the Telecommunications Act, 2023. On migration, the authorisation fee carries the same floor as for fresh entrants: the higher of 8% of AGR or 30% of the applicable entry fee.

Cross-Holding Limits

Rule 12 guards against concentration within a market. A new authorised entity or licensee should not hold a beneficial interest in a competing entity in the same service area. A "material shareholder" generally means a person holding 10% or more of the issued, subscribed or paid-up equity, or otherwise exercising control. Carve-outs apply, notably for VNO-parent relationships and specified satellite arrangements.

Technical and Operating Conditions

Chapter V sets the operating ground rules, and data sovereignty runs through all of them:

• Data localisation: all systems of the telecom network must sit within the authorised service area, except permitted cloud-hosted telecom network and satellite gateway cases within India. All network data, logs and information must be stored in India, with no copies routed, shared or made available outside India.
• Domestic traffic: domestic traffic must not be hauled or routed through any place outside India. Satellite or domestic submarine cable may be used only where it does not involve foreign transit.
• Network sharing: passive and active sharing is allowed, but sharing core network elements needs prior written Central Government approval, which may require that no service area is left with fewer than two core networks for the relevant service. Sharing of lawful interception and monitoring facilities also needs prior approval.
• Interconnection and peering: must be technically compatible and effective. IP traffic must be carried over IP interfaces, and circuit-switched traffic must be converted to IP before hand-off to another NSO network.

Security Conditions

Chapter VI is among the most demanding parts of the Rules, reflecting how central national security has become to telecom policy:

• Nationality: a majority of directors must be Indian citizens, and the network security chief, core network officers, system administrators and nodal officers must be resident Indian citizens.
• MHA vetting: foreign nationals require Ministry of Home Affairs security clearance before appointment as Chairman, MD, CEO or CFO and before deployment on the network, with recurring vetting as required.
• Trusted sources: security is administered through the National Cyber Security Coordinator framework, and only trusted products may be deployed where required.
• Lawful interception and KYC: interception systems, monitoring facilities, user identification, calling-line-identification anti-spoofing and AI-based fraud management are all mandatory.
• Business connections: enhanced due diligence before activation, including premises inspection and verification of representatives and end users, with premises re-inspected at least every six months. Leased circuits, internet leased lines, SIP trunks, PRI lines and SMS gateway links carry extra pre-activation and documentation duties.
• SIM limits and Point of Sale: connections for natural persons are capped as notified by the Central Government. A Point of Sale must carry a unique identity common across entities, registered with document checks, biometric verification and physical address verification. False or suspicious activity triggers blocking within 24 hours and a three-year ban on re-engaging that POS.

Satellite Networks

Chapter VII is purpose-built for the satellite era, and the through-line is that India-touching traffic stays under Indian control:

• Gateway in India: traffic to or from user terminals in India must pass through a satellite earth station gateway located in India.
• No foreign routing or mirroring: India-originating or India-terminating satellite traffic must not be routed through foreign gateways, directly or via inter-satellite links, even during gateway failure or network optimisation, and must not be mirrored to networks outside India.
• Real-time monitoring: facilities must be provided to verify compliance with the routing and mirroring restrictions.
• User terminals: must be registered on the equipment identity register, with customs-clearance verification for imported terminals (except in India's exclusive economic zone). Location-spoofing tools are prohibited.
• Fixed terminals and NavIC: stationary fixed satellite service terminals must be bound to the user premises within plus or minus 100 metres, with approval required to relocate. Terminals must also comply with Government directions on positioning through India's regional navigation satellite systems.
• Rollout: satellite-network rollout using the gateway and assigned spectrum must be completed within 12 months of spectrum assignment.

Service-Specific Conditions

Chapter VIII adds four Parts of detailed conditions for Unified, Access and Wireline, Internet, and Long Distance authorisations. Importantly, where Chapter VIII conflicts with the earlier chapters, Chapter VIII prevails.

• Unified service combines the access, internet and long-distance scopes, but separate accounts must be maintained for each.
• VNO under unified service must connect to the parent NSO network and post contract details or changes on the portal within seven days; interconnection with other networks runs through the parent NSO.
• Access service is the broadest scope: voice and non-voice messaging, internet and internet telephony, intra-circle long distance, captive non-public networks, cell broadcast, direct air-to-ground communication, M2M and enterprise services. An all-India access authorisation also enables in-flight and maritime connectivity.
• Internet service covers internet access and limited internet telephony, with NSOs required to host DNS resolution within India. ISPs are also allowed to provide domestic leased circuit services.
• Long distance service covers national and international long distance, including bearer traffic, leased circuits and calling cards. Use of submarine cable systems is permitted for domestic connectivity, and the concept of a cable landing station point of presence (CLS-PoP) is introduced.

Breach, Enforcement and Going Digital

Chapter IX ties enforcement back to the parent Act. A breach of these Rules is treated as a breach under section 32 of the Telecommunications Act, 2023. Orders of suspension, revocation or curtailment take effect on the 61st day from their publication on the portal, and the authorised entity must give users at least 30 days' prior notice, spelling out their options including mobile number portability. The entire system, from application to enforcement, runs through notified portals under section 53.

The shift from license to authorisation is more than a change of vocabulary. It folds a patchwork of permissions into one digital, time-bound framework, and bakes data sovereignty and security into the license to operate itself.

What It Means in Practice

For incumbents, the immediate task is migration: existing licensees must move their terms onto the new authorisation under section 3(6), and reconcile their financial and security obligations with the new chapters. For new entrants, the lighter circle-level internet and VNO routes lower the cost of entry, while the additive net-worth rules keep multi-authorisation plays capital-intensive. For satellite operators, the gateway-in-India and no-mirroring rules set a clear, and demanding, compliance baseline. And for everyone, data localisation and the trusted-source and nationality conditions are now part of the price of admission, not an afterthought.

The Rules reward operators who treat compliance as architecture: built into network design, corporate structure and vendor selection from the start, rather than retrofitted under deadline pressure.

Sources & Further Reading

This brief is based on the notified Rules and the parent statute, including:

• Telecommunications (Authorisation for Provision of Principal Telecommunication Services) Rules, 2026, G.S.R. 513(E), Ministry of Communications (DoT), notified 23 June 2026; Gazette of India (Extraordinary), 24 June 2026
• The Telecommunications Act, 2023 (44 of 2023), in particular sections 3, 32, 53 and 56
• Schedules A (fees and initial guarantees), B (Point of Sale) and C (eligibility thresholds) to the Rules
• TRAI Act, 1997 and regulations made under it, which continue to apply to authorised entities
• Unified License and Unified License (VNO) agreements under the Indian Telegraph Act, 1885 (updated to 31 March 2024), used for the old-versus-new comparison