More than 500 Internet Service Providers (ISPs) have surrendered their ISP licenses to the government and exited the business, reports The Hindu Business Line. The report states that the Department of Telecom (DoT) had issued around 903 ISP licenses till now but only 150 ISPs remain operational in the country at present. Citing Industry experts, the report attributes these exits to poor government policies for ISPs. It states that the policies have primarily focused on large telcos and that standalone ISPs were forbidden from offering full suite of services.

In an interaction with Medianama, Rajesh Chharia, President, Internet Service Providers Association of India (ISPAI) confirmed that around 150 ISPs are currently sustaining in the existing conditions since the policies are biased against independent ISPs.

He also noted that none of the investors are currently interested in investing in standalone ISPs, due to the frequent policy changes made by the government and the negative stance of the existing incumbents. Chharia also pointed out that while the government is planning to reduce the spectrum price for telecom companies, it is not considering taking a similar measure for standalone ISPs.

Chharia stated that the government should consider offering domestic bandwidth at lower cost to standalone ISPs, just like TRAI reduced the access facilitation charges (AFC) for submarine cable landing stations last month. In addition, he stated that the availability of infrastructure from incumbents would also improve the existing situation for these standalone ISPs.

MediaNama readers may recall that Tikona Digital Networks had shut down operations in 13 of 38 cities last month, while Qualcomm had received its ISP license in March 2012, after a 18-month delay. Qualcomm had later inked an agreement with Bharti Airtel to sell 49% stake in its Indian entities that held BWA/4G licenses in Delhi, Mumbai, Haryana and Kerala.

Related:

All Indian ISPs Will Have To Connect Through NIXI: Report
Not Enough: TRAI Looks At Fines For Not Meeting Broadband Quality Of Service
TDSAT Rules In Favour Of ISPs In License Fee Dispute
India’s New Telecom Policy 2012: What’s Changed? Additions & Omissions
India’s New National Telecom Policy Approved; Unified Service Licenses, Intra-Circle MNP, Spectrum Reforms
Draft New Telecom Policy 2011: Broadband Related Provisions & Issues Not Addressed