Announcing the policy here on Sunday, prime minister AB Vajpayee declared that ISP licences would be issued to private sector companies before November 7. The government has decided not to put a cap on the number of licences to be issued.

Vajpayee made the announcement while inaugurating the Bangalore IT.Com '98 exposition at the International Technology Park in Whitefield near Bangalore.

The period of the licence will be 15 years. As per the announcement, ISP providers will pay a zero licence fee for the first five years and a fee of Re 1 thereafter, Vajpayee said. This was one of the recommendations of the prime minister's IT task force.

ISPs will be free to bring in foreign equity investment, subject to the maximum of 49 per cent as is applicable in the rest of the telecom sector. Over 150 companies areexpected to apply for ISP licence, out of which at least 50 will be national level players.

These include HCL, Global TeleSystems, Satyam Computers, Wipro group, Bharti British Telecom Internet Ltd, MCI, Sterling group, Wipro, RPG Sprint, Birla group and most of the existing E-mail providers and VSAT companies.

The announcement, however, failed to cheer the private companies as it is not yet clear if the policy has spelt out the conditions for setting up private international access gateways and the revenue-sharing mechanism between ISPs and VSNL.

The policy has been hanging fire for close to three months.

"The aim of the new ISP policy is to achieve the fastest possible proliferation of quality Internet service all over India at an affordable price. Guided by this objective, we have drawn up a licence agreement which is both customer and investor friendly," the prime minister said.