Dishnet cuts rates in bid for market share
eth.net
By Uday Lal Pai
India Correspondent, asia.internet.com
[November 18, 1999--MUMBAI] Dishnet Limited, a Sterling Group company, has kicked-off its Internet service in the Indian capital with the lowest-access rate in the country: Rs2.50 ($0.06) per hour. This may lead to a second round of Internet price wars in India.
Dishnet's strategic plan is to become number one among the private ISPs in the major cities in India through competitive pricing. Vijay P Bhatkar, chairman of the company, believes that only by offering low-access tariffs can Internet usage proliferate throughout the country.
"If India is to have 6 million Internet subscribers by 2002, it is important that access charges are kept low." Vijay said, adding that most ISPs, including his, would not make money by providing "vanilla" access services. He hopes to boost revenues through value-added services.
"Our business plan is based on affordability and profitability," said Ajit Pradhan, general manager, planning and infrastructure. "Our target at 20 per cent of the total Internet market in two years", he stated.
Dishnet has already made a strong presence in Chennai, Pune, Bangalore and Coimbatore among other cities. It launched its advanced Internet services recently in Delhi. The dial-up Internet market size in Delhi is about 180,000 subscribers. Dishnet's targets are 50,000 dial-up customers, 250 ISDN and 125 leased-line businesses in Delhi during its first year of operation.
The chairman and managing director of Mahanagar Telephone Nigam Limited (MTNL) acknowledged the fact that his company may face tough competition from Dishnet because of the competitive pricing, and may have to reduce its own Internet tariff. However, the Bharti BT officials claimed that they are fully prepared for any price war. "Our focus is on quality and our customers are satisfied with us", said a top official.
Dishnet hopes to complete its $30 million investment in software, hardware and connectivity costs for the 8 cities by March 2000. Its total outlay of about $100 million is earmarked for its 'education to home' (hence the name 'ETH') Internet project. Dishnet plans to offer its services in Mumbai soon, followed by Ahmedabad and Calcutta.
Asked how Dishnet planned to make money with such low rates, the chairman Vijay Bhatkar explained: "No ISP makes money from providing only access. We are no different. Revenue should flow from value-added services we intend to provide".
"We plan offering Web hosting and leased lines, as well as creating virtual private networks and setting up Internet data centers", said Vijay. Dishnet is also in the process of launching DSL (digital subscriber loop) services.
"As our subscriber base grows, we will also facilitate e-commerce. We expect that our value-added services to generate sufficient revenue to make Dishnet profitable in 1999-2000", added Vijay. |
