How to start an ISP business in India: step by step (2026)

Decide: NSO or VNO, circle or national

NSO (Network Service Operator) owns and runs the network. VNO (Virtual Network Operator) rides on a parent NSO's network and sells service under its own brand. Then pick the service area: one telecom circle or metro, or national. Most local and regional ISPs start with a single circle.

Form a company that qualifies

Only companies can apply, and a One Person Company is excluded. Foreign investment must follow current FDI policy. You need no pending government dues and a clean management record. A majority of directors must be Indian citizens, and key security roles (network security chief, system administrators, nodal officers) must be resident Indian citizens.

Know the official fees

Figures below follow Schedule A and Schedule C of the 2026 Rules. Confirm every amount against the Gazette notification and the DoT portal before you pay, because the Gazette text is the controlling source.

Net worth is nil for internet service. The old category C entry fee was ₹2 lakh for a circle; the new circle NSO entry fee is ₹50,000. North East and Jammu & Kashmir get concessions on some authorisations.

Plan for the recurring authorisation fee

You pay 8% of adjusted gross revenue (AGR), of which five-eighths goes to Digital Bharat Nidhi. From year two the fee is the higher of 8% of AGR or 30% of your entry fee. Payments are quarterly, with an audited revenue statement due by 30 June each year. Late payment attracts interest at the SBI one-year MCLR plus 2%. If you also sell TV, ask your accountant how the Rules treat that revenue in AGR before you price bundles.

Apply on the DoT authorisation portal

1. Register and log in at eservices.dot.gov.in/authorisation-portal.
2. Choose Internet Service, your operator type and service area.
3. Upload company documents, director details, security undertakings and the processing fee.
4. Receive a Letter of Intent, then submit the entry fee and initial guarantee (a bank guarantee, a performance bond, or a cash deposit).
5. The Central Government grants the authorisation. There is no agreement to sign. The term is up to 20 years, renewable.

Build the network

• Upstream bandwidth: buy IP transit from a licensed national provider, ideally two providers for redundancy, and peer at an Internet Exchange to cut cost and latency.
• Core: border routers, a BNG (broadband network gateway), RADIUS/AAA for authentication and a NAT/CGNAT platform if you lack public IPv4 space.
• IP addresses: apply to the Indian registry for your own address space and AS number if you will multi-home.
• DNS: as an NSO you must host, own and run DNS resolution facilities within India, with redundancy and security.
• Last mile: fibre to the home (GPON) is the standard. Secure right-of-way permissions, or partner with local cable operators who already have poles and duct.
• Data: all network data and logs must stay in India.

Meet security and KYC obligations

The rules make lawful interception facilities, subscriber identification, and business-connection due diligence mandatory. Premises of business customers are inspected before activation. Keep subscriber KYC complete, retain logs as CERT-In and DoT require, and use trusted equipment sources where required. Point-of-sale agents must be registered and verified.

Set up billing, support and operations

Before your first customer: a billing system with GST invoices, a RADIUS-linked subscriber database, a ticketing and support process, a network monitoring system with alerting, and a field team for installation. Follow TRAI's broadband quality-of-service rules and publish a complaint channel.

Launch with a small area first

Cover one neighbourhood or a few housing societies. Sign 300 to 500 subscribers before you expand the network. Track churn, tickets per 100 users and installation time. Fix operations before you add capital.

Add services that raise revenue per user

Once the base is stable, bundle managed Wi-Fi, static IPs, leased lines for businesses, and IPTV. If you hold an internet authorisation, it can also be the base for IPTV under the current route. Our IPTV guide covers that path.