This guide walks through the current framework as it stands in 2026, incorporating the material changes brought by the Telecommunications Act, 2023, India's first comprehensive rewrite of its telecom law since the Indian Telegraph Act of 1885.
The Unified Licence Framework
The Unified Licence (UL), launched by the Department of Telecommunications (DoT) in 2013, replaced the previous maze of technology-specific licences. The UL is a single, technology-neutral licence document with an initial 20-year term. Operators can offer any combination of telecom services by taking the relevant service authorisation appended to their UL, without re-applying for a new licence.
This matters for growing businesses: a company that starts as an ISP and wants to later offer voice services or VNO capacity can do so by adding an authorisation, not by starting a new licensing process. The Telecommunications Act, 2023 reinforces and codifies this framework while introducing the concept of "authorisations" for spectrum use as a parallel instrument.
Key Service Authorisations: What They Are and What They Cost
| Authorisation | Service | Entry Fee | Revenue Share |
|---|---|---|---|
| Access Services (AS) | Mobile and fixed-line voice, data and broadband to end-users | ₹10–20 Cr (per circle) | 8% of AGR |
| Internet Services (IS) – Cat A | National internet access services | ₹3 Cr | 8% of AGR |
| Internet Services (IS) – Cat B | State/circle-level internet access | ₹1 Cr | 8% of AGR |
| Internet Services (IS) – Cat C | District-level internet access | ₹30 Lakh | 8% of AGR |
| Virtual Network Operator (VNO) | Resale of capacity; MVNO, virtual ISP | ₹10 Lakh | Per contracted operator terms |
| National Long Distance (NLD) | Long-distance connectivity between service areas | ₹25 Cr | 8% of AGR |
| International Long Distance (ILD) | International voice, data, submarine cables | ₹25 Cr | 8% of AGR |
Revenue share is calculated on Adjusted Gross Revenue (AGR), a definition that has been the subject of India's most consequential telecom litigation. The Supreme Court's 2019 ruling significantly expanded the AGR definition, generating lakh-crore dues for major operators. New entrants and expanding operators should take detailed legal advice on AGR computation methodology before projecting licence fee obligations.
Who Needs What: A Decision Guide
- New mobile operator (MNO): UL with Access Services authorisation, nationally or for specific circles. Spectrum must be separately obtained through DoT's auction process.
- ISP wanting to provide public internet: UL with Internet Services authorisation, Category A for national, B for state/circle, C for district-level operations.
- MVNO or virtual telecom service provider: UL with VNO authorisation, plus a commercial agreement with a licensed MNO that permits VNO relationships. The VNO route has the lowest entry barrier (₹10 lakh) and the fastest path to market.
- Enterprise wanting a private 5G network (CNPN): No separate licence required for the enterprise itself. The operator's licence covers the captive network. The enterprise negotiates a CNPN agreement with a licensed operator.
- Tower and passive infrastructure company: Infrastructure Provider Category I (IP-I) registration with DoT, a lighter-touch registration rather than a full UL, covering passive infrastructure like towers, dark fibre, and conduits.
- Satellite internet provider (e.g. Starlink, OneWeb): UL with GMPCS/Satellite Services authorisation, plus spectrum assignment under the satellite spectrum framework clarified by the Telecommunications Act, 2023.
The DoT Application Process
All UL applications are processed through the SARAL Sanchar portal (saral.dot.gov.in). The process is online end-to-end but requires significant document preparation:
Eligibility assessment
Foreign ownership is permitted up to 100% in most telecom categories (the cap was progressively removed from 2021). Promoters must meet net worth requirements specific to the authorisation category. Confirm eligibility before starting the application.
Document preparation
Key documents: Memorandum and Articles of Association, three years of audited financials, board resolution authorising the application, proposed network rollout plan, security undertaking (in prescribed form), and details of key management personnel.
Online submission via SARAL Sanchar
Applications are submitted, fees paid, and documents uploaded through the portal. Processing typically takes 60-90 days for standard authorisations; novel or complex service categories may take longer and may require regulatory clarification from DoT.
Bank guarantee and entry fee payment
A bank guarantee (amount varies by authorisation) must be provided upfront. The entry fee is paid at grant. Both are conditions precedent to the authorisation becoming effective.
Spectrum assignment (where required)
The UL authorisation and spectrum assignment are separate processes. Access Services operators must bid in DoT's spectrum auctions (conducted on TRAI's recommendations) or acquire spectrum through secondary trading. The licence does not automatically come with spectrum.
The Unified Licence is one document, but what it authorises, what it costs, and what it obligates you to do vary enormously by service category. The choice of authorisation is where the strategic and legal work actually happens.
Ongoing Compliance: What Licensees Must Do
- Annual Licence Fee (ALF): Paid each year as 8% of AGR. Quarterly advance payments are required; reconciliation and final payment happen annually after accounts are audited.
- Spectrum Usage Charge (SUC): Payable on top of ALF for operators holding spectrum, calculated as a percentage of AGR, varying by band and quantity held.
- USO Fund contribution: 5% of AGR contributed to the Universal Service Obligation Fund, supporting rural connectivity infrastructure development.
- Rollout obligations: Access Services authorisations require network deployment milestones, specific districts and states within 3 and 5 years of grant. Non-compliance attracts financial penalties; extensions require DoT approval.
- Security conditions: Lawful interception capability, IMEI tracking compliance, subscriber verification obligations, and network security audits per DoT's security guidelines.
- Quality of service reporting: TRAI requires regular QoS reporting and subscriber data submissions. Non-compliance with QoS benchmarks can trigger financial penalties and public disclosure.
What the Telecommunications Act, 2023 Changes
Key changes under the Act relevant to licensing:
- Statutory right of way: The Act creates a statutory right for telecom operators to deploy infrastructure (lay fibre, erect towers), reducing but not eliminating municipal friction that has historically slowed network rollout.
- Spectrum framework: The Act confirms spectrum auctions as the primary assignment mechanism and provides a clearer statutory basis for administrative assignment in specific cases (satellite, defence, emergency services), resolving ambiguity in the previous framework.
- Sunset of legacy licences: ISP licences issued under the old separate-licence regime and legacy CMTS authorisations will need migration to the UL format over a transition period. Operators holding pre-2013 licences should map their migration timeline.
- Biometric verification: The Act expands the legal basis for biometric subscriber verification for SIM issuance, relevant for operators managing large pre-paid subscriber bases.
India's telecom licensing regime rewards thorough preparation and penalises shortcuts. The entry fee is often the smallest cost; the ongoing AGR-linked obligations, rollout commitments, and security requirements are where operators find the compliance complexity. Done right, a UL authorisation is a gateway to one of the world's fastest-growing digital economies.