Subject: Internmet monopoly
InternetNews.com India Correspondent 

[November 25, 1998--BANGALORE] The rush by private ISPs to capture 
chunks of the newly liberalised Indian Internet market continues, 
with analysts now expecting 1.5 million Internet users to be online 
by year 2000--up from the current estimated 500,000 users on the Net. 

In the western state of Gujarat, ICENET has become the first company 
to receive a private ISP license. Its proposed value-added offerings 
include Web site design and hosting. Targeted businesses and 
consumers for ICENET will be in the cities of Vadodara, Rajkot, 
Jamnagar, Bhavnagar, Surat and Gandhinagar.  

"By the end of the year, we can expect to see major positioning moves 
from 6-8 national ISPs--such as VSNL, MTNL, Satyam Infoway, Bharti-BT 
and Global Telesystems--plus 5-6 medium-size players in each major 
metro, and at least 10-20 smaller players," said Ajit Balakrishnan, 
managing director of the popular Indian Webzine and e-commerce site 
Rediff on the Net.  

Trying to become more competitive, monopoly long distance carrier and 
commercial sector ISP Videsh Sanchar Nigam Ltd. (VSNL) has reduced 
its Internet access rates over the past three years, from Rs. 25,000 
for 250 hours down to Rs. 10,000 for a 500-hour account (1 USD = Rs. 
43). VSNL will be spinning off a separate subsidiary company called 
VSNL Seamless Services Pvt. Ltd. (VSSL), focusing on value-added 
services like EDI.  

VSNL is planning to bundle Internet access with PC purchases, via 
"Internet-ready" computers. VSNL has also been a partner in major 
under-sea cable projects, such as the SEA-MEA-WEA which stretches 
from Japan to the U.S. via India, the Middle East, South Africa and 
Europe.  

Players eyeing partnerships for cable-TV Internet access include 
Pentafour Software and Exports, which is setting up a wide area 
network of IBM AS 400 mainframes which can be used for interactive TV 
and Internet access services, according to managing director V. 
Chandrasekaran.  

Major ISP player Satyam Infoway has launched a content and community-
oriented Web site called SatyamOnline with news and discussion on a 
wide range of topics like politics, car finance, and music.  

India on the Internet, an Internet solutions company based in 
Calcutta, has launched a comprehensive news site called AllIndiaNews, 
geared at Internet users who would appreciate a round-the-clock news 
service on the Web.  

But ISPs may face challenges in getting enough telephone lines in the 
four big Indian cities--Bombay, Delhi, Bangalore and Madras--from 
where up to 70 per cent of new ISP connection demand is expected to 
come.  

Legal and regulatory challenges still arise in areas like setting of 
access tariffs for private ISPs, international gateways, Internet 
telephony, and opening up of the last-mile telecom market.  

"The most revolutionary aspect of India's Internet policy is letting 
ISPs do the last mile connect--and this could well be the source of 
litigation from basic service license holders who worry about voice 
over IP," predicted Balakrishnan.  


The Indian government has now set up a 12-member expert group on 
telecommunications, headed by deputy chairman of planning commission 
Jaswant Singh, to make recommendations on these issues. For the 
coming months, moves in ISP business and regulation are expected to 
dominate the Internet market, while prospective ISPs gear up with 
value-added offerings in content, community, e-commerce and 
intranetworking.  

Earlier this week, India's first privately run ISP, Satyam Infoway, 
launched its Internet access service. It hopes to sign up 100,000 
subscribers in its first year of operation from almost 40 cities, 
according to managing director R. Ramaraj. Nearly 300 private firms 
have joined the race to launch ISPs.  


Last modified: Wednesday, 25-Nov-1998 12:01:21 EST 


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