A Project Report On Macro Analysis of Internet Service Provider In partial fulfillment of the requirements for the subject Strategic Management MBA Semester- III (Marketing Elective-2009-11) Submitted To: Prof. Preeti Salvi Submitted By: Name Roll No: Ami Bhavsar M-12 Varun Dave M-17 Viraj Shah M-1 NehaVyas M-09 Jatan Shah M-10 S.V Institute of Management Gujarat Technological University
In-depth analysis of Internet service provider industry
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A
Project Report
On
Macro Analysis
of
Internet Service Provider
In partial fulfillment of the requirements for the subject
Strategic Management
MBA Semester- III (Marketing Elective-2009-11)
Submitted To:
Prof. Preeti Salvi
Submitted By:
Name Roll No:
Ami Bhavsar M-12
Varun Dave M-17
Viraj Shah M-1
NehaVyas M-09
Jatan Shah M-10
S.V Institute of Management
Gujarat Technological University
INDEX
Chapter
No.
Content Page
No.
ACKNOWLEDGMENT I
PREFACE II
EXECUTIVE SUMMARY III
1 Research Methodology 1
2 Introduction 2
2.1 Types of Access 3
2.2 Trends in the ISP market 6
2.3 The Physical Structure of an ISP 9
2.4 What Services do ISPs Offer? 10
3 PEST Analysis 20
3.1 Political 22
3.2 Economic 23
3.3 Sociological 24
3.4 Technical 25
4 Five Force Analysis 26
4.1 Rivalry within Industry 27
4.2 Threat of Substitute Products 29
4.3 Threat of New Entrants 30
4.4 Bargaining Power of Suppliers 30
4.5 Bargaining Power of Buyers 30
5 Driving Forces of ISP 33
6 Key Success Factors 35
6.1 The technical edge 35
6.2 Financial sustaining power 35
6.3 High marketing and promotional budgets 36
6.4 Strategic alliances with ancillary service providers 36
6.5 Lobbying power with central and state Governments 36
7 Strategic Group Mapping 38
8 OT Analysis 40
8.1 BSNL SWOT Analysis 45
9 Major issues confronting industry 51
10 Conclusion 54
11 Appendix 56
11.1 Statistics 56
11.2 Guidelines for ISPs 57
Table of Figure
Chapter No. Name of Figure Page No.
Chapter 2 Introduction
2.1 ISP Specialization 8
2.2 Structure of an ISP 9
2.3 Group company wise Market Share 18
2.4 ISPs having all India licence 19
Chapter 3 PEST Analysis
3.1 ISP PEST Analysis 21
Chapter 4 Five Force Analysis
4.1 Porter’s 5 Forces Model for the ISP Industry 27
Chapter 7 Strategic Map Grouping
7.1 Strategic Map Grouping 39
Chapter 8 OT Analysis
8.1 ISP OT Analysis 40
8.2 Threats to ISPs 42
I
ACKNOWLEDGEMENT
We take this opportunity with great pleasure to present before you this project report on
Macro Analysis on Internet Service Provider which is a result of co‐operation, hard work and
good wishes of many people.
No words can adequately express our sincere thanks to all those who have helped us in making
this project a success. Also we acknowledge our deep sense of gratitude towards our guide
Prof. Preeti Salvi. We are also grateful to Prof. Bhavin Pandya, Head of the Department,
S.V. Institute of Management, Kadi.
Our debt to those who have helped us in one way or the other is heavy indeed. We would like to
appreciate contribution of friends who have extended their complete support in completion of
this project.
Our thanks also goes to our faculty members, seniors and also SVIM library staff for extended
their help; co-operation and support which have greatly ease our work and also for providing us
literatures which helped us to complete our assignment work.
Lastly, no words can adequately express our debt of gratitude to our parents for generating in us
perennial interest in higher studies. We are thankful to the Almighty for giving us strength,
courage and patience to complete this project.
Ami Bhavsar
Varun Dave
Viraj Shah
Neha Vyas
Jatan Shah
II
PREFACE
“Experience is the best teacher”. The saying has played a guiding role in the infusion of our
practical work and learning from it .Person can’t learn by merely reading hundreds of books on
it. He/she requires practicing his hand at the helm of it. Similarly management learning remains
incomplete without a test of real business life. Thus theoretical knowledge is not enough for
management students; practical study holds an important place. Our knowledge remains
incomplete without practical aspect like this assignment. “True learning is born out of experience
and observation.” Practical experience is one of the best types of learning that one can remember the
aspects of administration and management.
In Strategic Management we have chosen Internet Service Provider industry for which we have
analyzed importance of doing industry or company analysis as a base for matching strategy to
organizational resources, capabilities etc. We have also learnt the different analysis like SWOT, Five
forces as well as driving forces, Strategic map grouping key success factors for Internet Service
Provider. In short we have evaluated industry’s external environment as well as competitive position.
It is indeed a golden opportunity for us to present this report and indeed a matter of esteem honor
itself.
III
Executive Summary
An Internet Service Provider (ISP) is an industry that provides individuals and companies access
to the Internet and other related services. This report aims to introduce the reader to the idea of
Internet service provision, the services offered, the main players in the industry, and its current
state and its trends. It details the different types of types of access, and the physical structure of
an ISP. It also describes the services offered by ISPs, both basic services and premium services.
There is looks at the ISP market, analyzing the market forces and the influential environment and
also looks at the main players in the market, examining each individually, and identifying their
characteristics. Four general areas of threats to ISPs are outlined in following portion. It also
identifies the main trends in the ISP market and suggests emerging trends.
At last it sums up the main ideas of the report. Internet users access and send information either
through individual connections or through organizations such as universities or businesses. Users
are either those who use the Internet primarily to receive information, or content creators who
use the Internet to distribute information. ISPs connect those end users to Internet backbone
networks, which interconnect with other backbone providers.
Mergers and acquisitions have shown to be popular methods of growth, both in geographic terms
and in terms of customer base. These have been occurring not just among ISPs, but among many
companies entering the market. In spite of the large amount of mergers, the total number of ISPs
has stabilized due to the huge number of new entrants.
Telcos, cable companies and others have entered the market, either by mergers and acquisitions,
or by creating ISPs themselves. These companies, amongst others, are proving to be an immense
threat to existing ISPs. There has been a tremendous emphasis on value-added services and on
content. Basic services have become commodities and customers are looking for new services to
add value. ISPs securing deals with popular entertainment and information companies will have
a great advantage in winning customers.
IV
Additional offerings such as quality of service, bundled services, banking, e-commerce etc. are
also becoming attractive to customers. There is a clear change of strategy both within an ISP and
between ISPs. Pricing models are changing, as are service offerings. It is predicted that many
companies may wish to specialize in one part of the market rather than trying to provide
everything involved with service provision.
1
Chapter 1
Research Methodology
Research Objective
Primary Objective :
To study the Industry Analysis of Internet Service Provider in India.
Secondary Objective :
To know the size and growth rate of the industry and to analyze various industry
structure.
To study various Key players operating in the industry and their various
strategies.
To Perform PEST, FIVE FORCE, and OT Analysis on Internet service Providers.
To identify various Driving forces and Key Success Factors effecting ISP
Industry.
To study various major issues confronting ISP Industry.
Research Design :
Causal Research
Research Type
Basic Research
Data Collection
Internet
2
Chapter 2
Introduction
An Internet Service Provider (ISP) is an industry that provides individuals and companies access
to the Internet and other related services. This report aims to introduce the reader to the idea of
Internet service provision, the services offered, the main players in the industry, and its current
state and its trends. It details the different types of types of access, and the physical structure of
an ISP. It also describes the services offered by ISPs, both basic services and premium services.
There is looks at the ISP market, analyzing the market forces and the influential environment and
also looks at the main players in the market, examining each individually, and identifying their
characteristics. Four general areas of threats to ISPs are outlined in following portion. It also
identifies the main trends in the ISP market and suggests emerging trends.
At last it sums up the main ideas of the report. Internet users access and send information either
through individual connections or throughorganizations such as universities or businesses. Users
are either those who use the Internet primarily to receive information, or content creators who
use the Internet to distribute information. ISPs connect those end users to Internet backbone
networks, which interconnect with other backbone providers.
The users receive Internet Protocol Suite (IPS), theInternet equivalent of dial tone, which routes
traffic between ISPs. ISPs fall into three broad groups: backbone providers, national providers
and local providers. Backbone providers are nationwide or multinational organizations that
control Internet routing. They often own significant pieces of the backbone itself.
National providers buy capacity and routing services from backbone providers and run Points of
Presence (POPs, locations of access points to the Internet) across the country (or the world).
National providers are often described as resellers since they are simply reselling bandwidth that
they have purchased from the backbone provider. Local providers operate in the same way as the
national group, but on a smaller scale. Usually they work within a smaller geographic area.
3
Accessing the Internet by means of an ISP
To access the Internet, generally a user must periodically pay an ISP and pay any applicable set-
up fee to connect to that ISP. Most ISPs charge a flat monthly fee, and some impose a per-hour
charge above a certain monthly threshold. The vast majority of users (mainly domestic users,
who make up approximately 98% of all accounts) reach their ISP today through their telephone
network, using a dial-up connection. Many businesses lease lines or use ISDN connections.
2.1 Types of Access:
2.1.1 Analogue Dial-Up
From a commercial perspective, dial-up access has a lower potential margin than dedicated
access. This is because dial-up cost of service is high, while the revenue per customer is low.
Service cost is high because modems and terminal servers (also know as access servers) are
expensive and dial-up billing can be complicated. Dial-up equipment can account for over 10%
of an ISP‘s total costs1. Per usage billing is expensive, but it encourages users to make more
efficient use of the resources. Flat-rate billing is cheap and easy. Customers also seem to favor
flat-rate billing, even if it means paying more than they would under the per-usage scheme. It is
easier to budget when you know exactly how much you will spend, plus customers seem to enjoy
the idea of ‗all you can eat‘. In spite of the advantages of flat-rate billing, typical user behavior is
to log on and then stay online for long periods of time, even if they are not using the internet.
This leads to a great inefficiency profits in the analogue case. And a degraded service, as users
may becontending for resources (e.g. modems bandwidth).
2.1.2 ISDN Digital Dial-Up
ISDN (Integrated Services Digital Network) dial-up has two main uses: as a fast pipe for
individual users, and as a low-budget LAN Internet connection. When used by an individual
user, it is just like analogue dial-up but the transmission is faster as it is over a digital line. When
used for LAN connection, it is just like a leased line connection, except that the line is not
1 Refer ‗Internet Telephony: Costs, Pricing and Policy‘, McKnight and Leida,MIT Internet Telephony Consortium,
1998 for more details
4
dedicated – it is only brought up when there is data to be transmitted or received. As far as the
ISP is concerned, equipment costs are reasonably low for ISDN, but transport costs are relatively
high compared to analogue. However, profits are significant, as compared with marginal profits
in the analogue case.
2.1.3 Dedicated Access
An ISP typically has a number of ports on a router through which it offers dedicated access. The
goal is to connect as many customers to these ports as possible. Although set-up costs can be
high for dedicated access (price being proportional to the distance from the ISP to the customer)
profits are high, generally bringing in over a quarter of an ISP‘s revenues, even though they may
only account for 1% of actual account numbers. Other traditional transmission methods are also
finding their place in the world of Internet access. Cable companies have already started offering
Internet access over theirnetworks.
Hybrid Fiber Coax (HFC) is used to provide this service. HFC uses cable modems. It employs
analogue fiber to a node that will serve a few hundred houses, and coaxial cable to the premises.
Because mobility has been an issue ofsuch importance in recent years, the combination of mobile
and Internet services will be of great importance to customers.
At present, the technology required for high-speed wireless access is unavailable. Wireless
Internet access will grow rapidly once the technology is available at a reasonable price2. Many
new last mile (i.e. from the telephone exchange or ISP to the customer) technologies are
emerging and it is likely that they will have a significant impact on Internet provision. If using
the telephone network to access an ISP, whether dial-up or dedicated, there is usually room for
complaint in terms of speed and reliability. This is for a simple reason - the telephone network
was designed to carry voice traffic and not high-speed data traffic. Therefore, many new
technologies are being developed for local loop data delivery.
2 Refer ‗Combining Mobile and Internet Services‘, Griffiths, N., Dataquest, June 1998
5
2.1.4 Digital Subscriber Line
DSL is the family of Digital Subscriber Line (DSL) technologies that has been developed to
provide high-speed links over twisted-pair copper telephone lines. Because long copper loops
distort signalquality, repeaters and amplifiers are installed on copper pairs at prescribed intervals
to restore signal quality. What DSL technologies do is use sophisticated modulation schemes to
pack data ontocopper wires, and do so without repeaters or amplifiers. DSL leverages the
telephone companies‘ investment in twisted-pair copper to nearly every home or business by
providing the ability to send voice and large amounts of data over existing lines. ADSL
(Asymmetric DSL) is the form of DSL with the most potential for Internet provision. It is
intended for the last mile into a customer‘s premises.ADSL technology consists of a pair of
modems on either end of a twisted-pair copper line, which provides symmetric transmission of
data up to 8Mbps downstream and 800kbps upstream.
2.1.5 WebTV
WebTV allows use of the Internet through a television set. A set-top box is installed and a
special WebTV ISP must be subscribed to. It is controlled by a handheld control or by a wireless
keyboard. Although the TV is used as the output device, the information arrives through a
telephone line and modem.
2.1.6 Digital Power line
Digital power line technology involves the utilization of the electricity distribution network as a
means of providing both power and telecommunications services to the home. An
implementation of power line communications has been developed in which an electricity
distribution network may be conditioned such that it can simultaneously carry two or more
electrical signals. The advantage of this method is that it uses an existing infrastructure that is a
system connected to almost every home and business.
2.1.7Fibertothe Curb
Fiberto the Curb (FTTC) refers to the installation and use of optical fiber directly to the curbs
near homes or anybusiness environment.This method uses digital fiber to a node serving 16-32
homes. The short link tothe customer is through any number of transmission technologies -
6
twisted pair,coaxial cable, optical fiber, microcellular microwave etc., depending on
thebandwidth of the services required.
2.1.8 Satellite
Satellite Internet access is likely to be usedfor customers in geographically
isolatedregions.Provision of two-way higher bandwidth capability over satellite is not common
inresidential markets because of the highcost, but hybrid solutions have recentlybeen developed
to deliver a highbandwidth capability via satellite with areturn path to a service provider
usingconventional PSTN technology. Thismethod is being used to provide interactive television
services and may beused in the future to provide fast InternetAccess3.
2.1.9 Radio Local Loop
In the UK, radio spectrum in the 10GHz region has been allocated for the deliveryof high
bandwidth services. Internetaccess by radio local loop would have itsadvantages and
disadvantages. It isflexible in the building of its accessinfrastructure, but it has practical
problemsof reach and interference, and costs ofterminal equipment can be high.
2.2 Trends in the ISP market
As the industry is maturing, differentiationand financial performance are becomingincreasingly
important. This is driving five major trends in the market:
Consolidation: mergers andacquisitions
Introduction of enhanced/value addedservices
Company to company interconnectionand peering agreements
Differentiation based on content
Web hosting
Consolidation
The trend of consolidation has beenevident over the last 18 months, withmany partnerships
arising between ISPs,and between ISPs and other companieswishing to enter the market.Large
3 Refer ‗Access to Bandwidth: Bringing Higher Bandwidth Services to the Customer‟
http://www.oftel.gov.uk/competition/l lu1298.htmfor more details
when it comes to building content. However, it has been established that content is to be one of
the main differentiators in the ISP market. Those years has meant intense rivalry within the
industry. Because there is such an enormous growth in the customer base, the market is still far
from saturation. This is an attraction to still more companies wishing to enter the market.
4.2 Threat of Substitute Products
There is a tremendous attraction for companies other than ISPs to offer Internet access and
services, especially if they know they can enter the market at a high level.They are also aware of
the threats of not being a part of this industry, and are entering at atremendous rate, either by
acquisition, merging, or simply becoming ISPs. They can provide similar services, and
sometimes at a reduced rate. They can offer bundled services which are most convenient to
some customers.
Non-technical companies have seen the opportunity to develop a web presence beyond just web
pages. Companies such as Tesco have entered the ISP market, but not necessarily to make
money from provision. As with Freeserver, Tesco enjoys the ease of information gathering
regarding their customers. There is also the opportunity to develop an online storefront. Tesco
has also recently begun to offer a free service to its clubcard holders10
. Supermarkets tend to
have a name people know and respect. They have customer awareness and experience dealing
with a large customer base.There also tends to be a great customer loyalty towards supermarkets,
which is why they are moving towards banking, and now Internet service provision. A portal is a
gateway to the World Wide Web that is, or proposes to be, a major starting site for users when
they get connected to the Web. Portal companies have started to show an interest in service
provision. Because there is to be a great differentiation based on content, portals are setting up
partnerships with ISPs, or becoming service providers as well as content providers. Yahoo! has
launched a free access service in an attempt to win market share. It has also acquired GeoCities,
a provider of free web sites, for $4.6 billion (January 1999)11
.
The above entrants are capable of providing the same services as ISPs, usually at a discounted
10
Refer TescoNethttp://www.tesco.net/index.htmfor more details 11 Refer „Yahoo! to Buy GeoCities ‟http://www.geoworld.com/ResearchT riangle/6551/ for more details
1. I hereby certify that I have carefully read the guidelines and draft Licence on Internet
Service. I fully comply with the terms and conditions therein.
2. I understand that this application, if found incomplete in any respect and/or if found with
conditional compliance or not accompanied with the processing fee, shall be summarily
rejected.
3. I understand that processing fee is non-refundable irrespective of whether or not the
licence is granted to me.
4. I undertake to sign the Licence Agreement, a draft of which has been supplied to me
within the prescribed time notified to me, failing which my application shall be rejected
and processing fee forfeited.
5. I understand that all matters relating to the application or licence if granted to me will be
subject to jurisdiction of courts in Delhi/New Delhi only.
*6. (a) I certify that none of the companies mentioned in Item 11 of the
application form are in default of the conditions of licence granted under
Section 4 of Indian Telegraph Act, 1885.
(b) I certify that the companies mentioned in Item 11 of this application form
are in default as on today of the conditions mentioned separately on attached
sheet of paper, of licence granted under Section 4 of Indian Telegraph Act,
1885.
*- strike (a or b) whichever is not applicable
7. I understand that such companies and their allied or sister concerns who have failed to
carry out the contractual obligations with regard to other Telecom Service Licences
granted under Section 4 of Indian Telegraph Act, 1885 shall be granted ISP licence on the
condition that any decision with regard to said default or breach whenever taken at the
discretion of the Central Government will be applicable in all respects to me.
8. I understand that if at any time any averments made or information furnished for
obtaining the licence is found incorrect, my application shall be liable to be rejected and
any licence granted on the basis of this application shall be liable for termination.
Date
Place
Signature and name of the
Authorised Signatory
(Company’s Seal)
25
Annex-II Details of Category ‘B’ Service Areas
Sl. No. Name of
Telecom Circle/ Metro
Service Area
Areas covered
01. West Bengal Entire area falling within the Union Territory of Andaman & Nicobar Islands and area falling within the State of West Bengal and the State of Sikkim excluding the areas covered by Kolkata Metro Service Area.
02. Andhra Pradesh Entire area falling within the State of Andhra Pradesh.
03. Assam Entire area falling within the State of Assam.
04. Bihar Entire area falling within the re-organised State of Bihar and newly created State of Jharkhand pursuant to the Bihar Reorganisation Act, 2000 (No.30 of 2000) dated 25th August, 2000.
05. Gujarat Entire area falling within the State of Gujarat and Union Territory of Daman and Diu, Silvassa (Dadra & Nagar Haveli).
06. Haryana Entire area falling within the State of Haryana except the local areas served by Faridabad and Gurgaon Telephone exchanges.
07. Himachal Pradesh Entire area falling within the State of Himachal Pradesh
08. Jammu & Kashmir Entire area falling within the State of Jammu & Kashmir including the autonomous council of Ladakh.
09. Karnataka Entire area falling within the State of Karnataka
10. Kerala Entire area falling within the State of Kerala and Union Territory of Lakshadeep and Minicoy.
11. Madhya Pradesh Entire area falling within the re-organised State of Madhya Pradesh as well as the newly created State of Chattisgarh pursuant to the Madhya Pradesh Reorganisation Act, 2000 (No:28 of 2000) dated 25th August, 2000.
12. Maharashtra Entire area falling within the States of Maharashtra and Goa, excluding areas covered by Mumbai Metro Service Area.
13. North East Entire area falling within the States of Arunachal Pradesh, Meghalaya, Mizoram, Nagaland, Manipur and Tripura.
14. Orissa Entire area falling within the State of Orissa.
15. Punjab Entire area falling within the State of Punjab and Union territory of Chandigarh.
16. Rajasthan Entire area falling within the State of Rajasthan.
26
17. Tamilnadu Entire area falling within the State of Tamilnadu and Union Territory of Pondichery excluding the areas covered by Chennai Metro Service Area.
18. Uttar Pradesh-West Entire area covered by Western Uttar Pradesh with the following as its boundary districts towards Eastern Uttar Pradesh : Pilibhit, Bareilly, Badaun, Etah, Mainpuri and Etawah. It will exclude the local telephone area of Ghaziabad and Noida. However, it will also include the newly created State of Uttaranchal pursuant to the Uttar Pradesh Re-organisation Act, 2000 (No.29 of 2000) dated 25th August, 2000.
19. Uttar Pradesh _ East
Entire area covered by Eastern Uttar Pradesh with the following as its boundary districts towards Western Uttar Pradesh: Shahjahanpur, Farrukhabad, Kanpur and Jalaun.
20. Chennai Local Areas served by Chennai Telephones, Maraimalai Nagar Export Promotion Zone (MPEZ), Minzur and Mahabalipuram Exchanges
21. Delhi Local Areas served by Delhi, Ghaziabad, Faridabad, Noida, and Gurgaon Telephone Exchanges
22. Kolkata Local Areas served by Calcutta Telephones.
23. Mumbai Local Areas served by Mumbai, New Mumbai and Kalyan Telephone Exchanges
NOTE: 1. Yenum, an area of Union Territory of Pondicherry is served under Andhra
Pradesh Telecom Circle in East Godavari LDCA. 2. The definition of Local areas of exchanges will be as applicable to the existing
cellular operators, i.e. at the time of grant of cellular Licences in Metro cities. 3. The definition of local areas with regard to the above service area as
applicable to this Licence is as per definition applicable to Cellular Mobile Service Licences as in the year 1994 & 1995, when those Licences were granted to them. This is in accordance with respective Gazette Notification for such local areas wherever issued and as per the statutory definition under Rule 2 (w) Indian Telephones Rules, 1951, as it stood during the year 1994/1995 where no specific Gazette Notification has been issued.
27
ANNEX-III
Performa for Financial Bank Guarantee
To
The President of India
In consideration of the President of India (hereinafter called ‘the Authority’) having
agreed to grant a Licence to M/s
_____________________________________________ of
_____________________________________ (hereinafter called ‘the LICENSEE’)
to establish, maintain and operate Internet Service (hereinafter called ‘the
SERVICE’) in ________________ Service Area (Name of Service Area) in
(hereinafter called ‘the Licence’) on the terms and conditions contained in the said
Licence, which inter-alia provides for production of a Bank Guarantee to the extent of
Rs.__________________ (in words _________________________) under the said
Licence by way of security for payment of the said Licence fee as well as such other
fees or charges required to be paid by the LICENSEE under the Licence. We
_______________ (indicate the name and address and other particulars of the
Bank) (hereinafter referred to as ‘the Bank’) at the request of the LICENSEE hereby
irrevocably and unconditionally guarantee to the Authority that the LICENSEE shall
pay all the dues, including but not limited to, the Licence fee etc. to the Authority.
2. We, the Bank, hereby undertake to pay the Authority an amount not exceeding Rs………(Rupees…………only) against any loss or damage caused to or suffered or would be caused to or suffered by the Authority by reason of any failure of the LICENSEE to extend the validity of the guarantee or give a fresh guarantee in lieu of existing one in terms of the Licence Agreement, pay all the above mentioned fees, dues and charges or any part thereof within the periods stipulated in the Licence. 3. We, the Bank, hereby further undertake to pay as primary obligor and not
merely as surety to pay such sum not exceeding Rs._________________________
28
(Rupees _____________________ Only) to the Authority immediately on demand
and without demur stating that the amount claimed is due by way of failure of the
LICENSEE to pay any fees or charges or any part thereof in terms of the said
Licence.
4. WE, THE BANK, DO HEREBY DECLARE AND AGREE that the decision of
the Authority as to whether LICENSEE has failed to pay the said Licence fees or any
other fees or charge or any part thereof payable under the said Licence and as to the
amount payable to the Authority by the Bank hereunder shall be final and binding on
us.
5. WE, THE BANK, DO HEREBY DECLARE AND AGREE that the
(a) Guarantee herein contained shall remain in full force and effect for a period of
One Year from the date hereof and that it shall continue to be enforceable till all the
dues of the Authority and by virtue of the said Licence have been fully paid and its
claims satisfied or discharged or till Authority satisfies that the terms and conditions
of the said Licence have been fully and properly carried out by the said LICENSEE
and accordingly discharged this guarantee.
(b) The Authority shall have the fullest liberty without our consent and without
affecting in any manner our obligations hereunder to vary any of the terms and
conditions of the said Licence or to extend time of performance of any obligations by
the said LICENSEE from time to time or to postpone for any time or from time to time
any of the powers exercisable by the Authority against the said LICENSEE and to
forbear or to enforce any of the terms and conditions relating to the said Licence and
we shall not be relieved from our liability by reason of any variation or extension
being granted to the said LICENSEE or forbearance act or omission on the part of
the Authority or any indulgence by the Authority to the said LICENSEE or to give
such matter or thing whatsoever which under the law relating to sureties would but
for this provision, have effect of so relieving us.
29
(c) Any claim which we have against the LICENSEE shall be subject and
subordinate to the prior payment and performance in full of all the obligations of us
hereunder and we will not without prior written consent of the Authority exercise any
legal right or remedy of any kind in respect of any such payment or performance so
long as the obligations of us hereunder remains owing and outstanding.
(d) This Guarantee shall be irrevocable and the obligations of us herein shall not
be conditional of any prior notice by us or by the LICENSEE.
6. We, the BANK, undertake not to revoke this Guarantee during its currency
except with the previous consent of the Authority in writing.
7. Notwithstanding anything contained above, our liability, under the Guarantee
shall be restricted to Rs…… and our Guarantee shall remain in force until….year
from the date hereof. Unless a demand or claim under this Guarantee is made on us
in writing within this date i.e. …. all your rights under the Guarantee shall be forfeited
and we shall be released and discharged from all liabilities thereunder.
Dated_______________ day ________________ for _____________________
(Name of the Bank)
Witness:
1………………………….. 2…………………………..
…………………………… ……..……………………
…………………………… ……………………………
…………………………… ……………………………
…………………………… ……………………………
30
ANNEX-IV
PERFORMA FOR PERFORMANCE BANK GUARANTEE
To
The President of India
In consideration of the President of India (hereinafter referred to as ‘the
Authority’) having agreed to grant a Licence to M/s
_____________________________________________ of
_____________________________________ (hereinafter called ‘the LICENSEE’)
to establish, maintain and operate Internet Service (hereinafter called ‘the
SERVICE’) as per Letter of Intent/ Licence No. ____________________ dated
__________ (hereinafter called ‘the said Licence’) on the terms and conditions
contained in the said Licence, which inter-alia provides for production of a Bank
Guarantee to the extent of Rs.__________________ (in words
_________________________) for the service by way of security for the due
observance and performance of the terms and conditions of the said Licence. We
_______________ (indicate the name and address and other particulars of the
Bank) (hereinafter referred to as ‘the Bank’) at the request of the LICENSEE hereby
irrevocably and unconditionally guarantee to the Authority that the LICENSEE shall
render all necessary and efficient services which may be required to be rendered by
the LICENSEE in connection with and/or for the performance of the said LICENSEE
and further guarantees that the service which shall be provided by the LICENSEE
under the said Licence, shall be actually performed in accordance with the terms &
conditions of the LICENCE to the satisfaction of the Authority.
2. We, the Bank, hereby undertake to pay the Authority an amount not exceeding Rs……(Rupees……only) against any loss or damage caused to or suffered or would be caused to or suffered by the Authority by reason of any breach by the said LICENSEE of the terms and conditions contained in the said Licence including failure to extend the validity of this guarantee or to give a fresh guarantee in lieu of the existing one.
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3. We, the Bank hereby, in pursuance of the terms of the said Licence,
absolutely, irrevocably and unconditionally guarantee as primary obligor and not
merely as surety the payment of an amount of Rs._________________________
(Rupees _____________________ Only) to the Authority to secure due and faithful
performance by the LICENSEE of all his/their obligations under the said Licence.
4. We, the Bank hereby also undertake to pay the amounts due and payable
under this guarantee without any demur, merely on a demand from the Authority
stating that the amount claimed is due by way of loss or damage caused or would be
caused to or suffered by the Authority by reason of breach by the said LICENSEE of
any of the terms or conditions contained in the said Licence or by reason of the
LICENSEE’s failure to perform any of it’s obligations under the said Licence.”
5. We, the Bank, hereby agree that the decision of the Authority as to whether
the LICENSEE has failed to or neglected to perform or discharge his duties and
obligations under the said license and/or whether the service is free from
deficiencies and defects and is in accordance with or not of the terms & conditions of
the said Licence and as to the amount payable to the Authority by the Bank
hereunder shall be final and binding on the Bank.
6. WE, THE BANK, DO HEREBY DECLARE AND AGREE that:
(a) the Guarantee herein contained shall remain in full force and effect for a
period of Two Years from the date hereof and that it shall continue to be
enforceable till all the dues of the Authority and by virtue of the said Licence
have been fully paid and its claims satisfied or discharged or till Authority
satisfies that the terms and conditions of the said Licence have been fully and
properly carried out by the said LICENSEE and accordingly discharged this
guarantee.
(b) the Authority shall have the fullest liberty without our consent and without
affecting in any manner our obligations hereunder to vary any of the terms
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and conditions of the said Licence or to extend time of performance of any
obligations by the said LICENSEE from time to time or to postpone for any
time or from time to time any of the powers exercisable by the Authority
against the said LICENSEE and to forbear or to enforce any of the terms and
conditions relating to the said Licence and we shall not be relieved from our
liability by reason of any variation or extension being granted to the said
LICENSEE or forbearance act or omission on the part of the Authority or any
indulgence by the Authority to the said LICENSEE or to give such matter or
thing whatsoever which under the law relating to sureties would but for this
provision, have effect of so relieving us.
(c) any claim which we have against the LICENSEE shall be subject and
subordinate to the prior payment and performance in full of all the obligations
of us hereunder and we will not without prior written consent of the Authority
exercise any legal right or remedy of any kind in respect of any such payment
or performance so long as the obligations of us hereunder remains owing and
outstanding.
(d) This Guarantee shall be irrevocable and the obligations of us herein shall not
be conditional of any prior notice by us or by the LICENSEE.
7. We the BANK undertake not to revoke this Guarantee during its currency
except with the previous consent of the Authority in writing.
8. Notwithstanding anything contained above, our liability, under the Guarantee
shall be restricted to Rs…… and our Guarantee shall remain in force until….year
from the date hereof. Unless a demand or claim under this Guarantee is made on us
in writing within this date i.e. …. all your rights under the Guarantee shall be forfeited
and we shall be released and discharged from all liabilities thereunder.
Dated_______________ day ________________ for
_____________________
(Name of the Bank)
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Witness:
1…………………………..
……………………………
……………………………
……………………………
2………………………….. ……………………………
……………………………
……………………………
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Annex-V
Application for Setting up of International Gateway for Internet
(Note: Please read the Guidelines and General Information carefully before filling up this
form. The Application form should contain complete information on each and every point.
Additional sheets may be added, if required. Incomplete application or application with
conditional compliance may be summarily rejected. Fifteen (15) copies of the application,
alongwith Annexures, may be submitted to ADG (LR), 10th Floor, Sanchar Bhavan, New
Delhi-110 001.)
I GENERAL INFORMATION
1. Name of the Company
2. ISP licence No: Service Area
3. Complete Postal Address with Telephone / fax nos./e-mail address
Corporate Office ...........................
Registered Office ...........................
4. Address for correspondence with telephone / fax nos./
e-mail address
5. Name of authorised contact person,
designation and telephone / fax nos./e-mail address
6. Resolution of Board of Directors / other proof
that the person signing the application is authorised
signatory (Enclose copy of resolution)
7. Percentage of foreign equity in the company.
(Total Foreign equity participation(s), if any
upto the extent of 74%, including NRI equity
both repatriable and non-repatriable is
allowed. Complete break-up of 100% of the
equity must be given).
Enclose certified copies of the
approval/clearance from Govt. of India
for foreign equity.
9. No. of International Gateways proposed
to set up:
10.Processing fee:
A non-refundable processing of Rs. 40,000
Per Gateway Location in the form of
Demand Draft payable to Pay and Accounts
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Officer (HQ), DOT, New Delhi to be
submitted with the application.
Details of the processing fee:
Demand draft no……………………….
Date ……………………….
Bank drawn ……………………….
Amount ……………………….
II TECHNICAL DETAILS OF INTERNATIONAL GATEWAY FOR INTERNET
(Note: If applying for more than one Gateway location, please furnish information required
under this Section, separate for each of the Gateway location.)
11. Location Details :
12. Bandwidth requirement :
(both short term and
long term)
13. A copy of the diagram of International
Gateway Network, giving all details,
including its location : Annex I
14. International carrier access scheme : Annex II
15. Details of equipments to be used for
International Gateway Network, including
make, specifications, model, etc. : Annex III
16. Technical specifications of equipment
to be used at customers' premises /
other internet service access nodes. : Annex IV
17. Carrier and modulation Technique : Annex V
18. Router/switch configuration for internet
gateway and allocation of ports
for various uses : Annex VI
19. Any other Technical detail of relevance : Annex VII
20. In case of satellite access, details of Earth
Station uplinking facilities and equipment to be
used for uplinking : Annex VIII
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21. Details of proposed interconnectivity
with other gateways in India : Annex IX
22. Details of International Connectivity on:
International Internet Backbone Service Provider
Point of access of International connectivity Annex X
23. Details of topology including how the
monitoring equipment will be fitted :Annex XI
Any change in the topology should be informed
to the Telecom Authority immediately.
24. Types of services that will be provided : Annex XII
III CERTIFICATES/UNDERTAKING
(i) We hereby certify that we have carefully read the guidelines and general information on
‘International Gateway for Internet’. We fully comply with the terms and conditions therein.
(ii) We also undertake to sign any Agreement with Government of India in this connection.
(iii) We understand that all matters relating to the application or permission/licence if granted
to us will be subject to jurisdiction of courts in Delhi / New Delhi only.
(iv) We understand that our application for operating Internet gateway in India is subject to
security clearance by Government of India.
(v) We would willingly provide all technical details of and access to various equipment,
including hardware, software and communications equipment, to security agencies as and
when demanded by the Telecom Authority.
(vi) We understand that if at any time any information furnished by us for obtaining the
permission/licence is found incorrect, our application shall be liable to be rejected, processing
fee forfeited and permission granted on the basis of this application shall be withdrawn and
the ISP licence agreement terminated.
(vii) We understand that the permission to set up Gateway is subject to other
clearances/permissions that are required as per the laws of the land and it will be the
responsibility of the licencee/company to obtain these clearances/permissions.
(ix) We understand that the Government (Licensor) reserves the right to make changes in
the conditions under which this permission/licence is granted.
Date : Signature and name of the
Place: Authorised Signatory
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ANNEXURE XIII
Additional Details for the Application for ISP Gateway for Internet using Foreign Setellite
I. Satellite Related:
(a) - Name of Satellite (preferably ITU notified name)
- Satellite Orbit Location
- Transmit/Receive Beam Identity
and Contour Level relative to Beam Centre (if available)