The Department of Telecommunications (DoT) has terminated the licenses of 35 companies which never launched ISP services. Some of these include Discovery Infoways, Q-Net Infosystems, Netconnect (India), Infinity.com, KTV Net. As per the Hindu, over 100 other license holders are yet to offer services after five years of being given the license.

As far as my reading of this news goes - it does absolutely nothing to improve the situation in the market: these ISPs weren’t preventing others from launching services. They also weren’t hoarding licenses, since as as many as 770 licenses. Perhaps the mistake was made on the policy front - a gross underestimation of the scale of operations required for a profitable ISP business - only 275 ISPs launched services, and 397 license holders quit.

What compounds the issue is the new policy of having an entry fee, and an annual license fee. Yeah, right - that’s exactly what we need to support a sector that isn’t really taking off. This ends up reducing the possibility of competition in a market that is dominated by government companies - BSNL and MTNL because of their legacy ownership of the last mile. There was a school of thought that the India might well take the wireless route to broadband due to the expense involved with fixed-line deployment. However, there have been quality issues with wireless broadband (wired as well, but that’s another story). If the government was serious about broadband in this country, they’d open up the last mile. Scrapping non-performing ISP licenses is just an eyewash.