The Hindu Business Line : VPN services likely to get cheaper

New DoT guidelines issued on June 21
ISPs to pay Rs 2.5 cr for national long distance licence
Lower than earlier fee of Rs 10 cr
Virtual private network services out of purview of ISP licence

New Delhi , June 23

The prices of Virtual Private Network (VPN) services could come down with the Department of Telecom charting out easier migration for Internet Service Providers wanting to offer the service.

According to the new guidelines issued by DoT on June 21, ISPs can now pay Rs 2.5 crore to the Government to take a national long distance telephone licence and start offering VPN services. This is much lower than the Rs 10-crore entry fee imposed earlier by the DoT on ISPs wanting to offer VPN services, which is primarily used by corporate and institutions to connect their offices across the country using a private leased line. And if the ISPs pay Rs 5 crore, theycan start offering VPN services to international customers as well.

However, the bad news for ISPs is that DoT has taken out virtual private network services from the purview of the Internet Service Providers licence and has made it part of the long distance telecom services. This means that ISPs will have to necessarily take a long distance licence to offer the private network services.

ISPs had been offering VPN services without paying any entry fee over the last five years. However, national long distance operators, who were also offering the same service by paying an entry fee of Rs 100 crore, objected to ISPs offering VPN without paying any fee to the Government.

DoT then created a separate category of ISP licence whereby VPN was allowed if the operators paid Rs 10 crore as entry fee. Subsequently, a number of ISPs including Asianet and Specranet withdrew services leaving only few operators such as Sify, Hughes and HCL in the fray.

The Department has now decided that ISPs can take an NLD or ILD licence if they want to offer VPN services. "After signing NLD/ ILD licence, provisional permission to offer VPN service, earlier granted under ISP licence, shall stand withdrawn and the ISP licence will stand reverted to the stage immediately prior to the grant of permission for VPN service," said the DoT guideline.

Commenting on the migration policy, ISPs said that though they were not too happy with the decision to make VPN part of the long distance licence despite the fact that they have been offering the service for more than fiveyears, it was better than having to pay Rs 10 crore as entry fee. DoT has also said that ISPs, who have already paid Rs 10 crore for VPN services, would be refunded by adjusting the excess amount against future payments.