U.S. says India lacks free market for Internet
The Indian government is failing to free the country`s infotech businesses from red tape despite focusing on the industry to lead India to economic prosperity, U.S. companies said today. "The lack of a free market for Internet in India means that India`s best asset, its educated technical elite, is being held back in the world market," Donald Conover, President of CBay Systems, told an Indo-U.S. conference on economic policies. He complained about India`s slow Internet access speeds and groaning telecom infrastructure. "Wednesday night it took me four hours, from 11 p.m. to 3 a.m. to download 125 e-mail messages...In the United States, the same download would have taken me less than five minutes, even from a dial-up connection from home," Conover said. Conover is among businessmen accompanying U.S. President Bill Clinton on a visit to India. India has licensed about 250 firms to offer Internet services, but of these barely a dozen have started operations. The others cite poor telecoms infrastructure as one of the reasons for not setting up shop.
The country`s software industry has set a $87-billion annual software export target by 2008, up from the current $3bn, but says robust telecoms infrastructure and widespread Internet access is essential to achieve it. India has about 750,000 Internet subscribers currently. Last March, the government announced a new policy, which eased licensing rules, set the ground for entry of new players and opened up the lucrative domestic long distance telecoms market to private competition. But, U.S. telecom firms said delays in government decisions were still common. "When we go for financing of our business plan, we are asked: `How are you sure you can get permission by July?` The uncertainty is a major, major killer," Pradman Kaul, Chairman and CEO of Hughes Network Systems, a unit of Hughes Electronics Corp. told the conference.
Hughes Network Systems is a partner in Indian joint venture Hughes Ispat Ltd, which is licensed to operate fixed-line phone services in Maharashtra. Officials of India`s Department of Telecommunications (DoT) admitted there had been delays in opening the $1.6bn domestic long distance telecoms market to privately-owned firms. The market was to be deregulated by January. "The NLD (national long distance) services will be opened up soon...steps are being taken," Telecom Secretary Shyamal Ghosh said. However, he did not say by when the domestic long distance telecoms market would now be deregulated. Almost eight years after private firms were allowed into telecoms services, more than 95% of India`s telecoms services revenues is accounted for by the DoT and state-run firms.
Source: Reuters |
