India's Department of Telecommunications announced this week that it would soon begin charging a market entry fee for ISPs (Internet-Service-Providers) intending to offer IPVPN (Internet-Protocol-Virtual-Private-Network) services. The government will also require each ISP to pay a 15% annual revenue tax in order to renew their operating license.

 

The entry fee for ISPs providing IPVPN will vary according to class: a category A license will cost 250 million rupees (US$5.5 million), category B license will cost 100 million rupees (US$2.2 million), and a category C license will cost 20 million rupees (approx. US$443,000).

 

Domestic long distance and international long distance telecom operators in India are also taxed 15% of their revenue for a licensing fee, and it is believed that complaints filed by these operators to the Department of Telecommunications prompted the new rule for ISPs.