India Prepares For Flood Of ISPs
techweb.com
(08/18/98; 10:24 a.m. ET)
By Uday Pai, Contributor, TechWeb
Major telecommunications providers and ISPs are
queuing up to gain entry into India's Internet service
market, opened up for competition by the Indian
government last month.
India's monopoly ISP, Videsh Sanchar Nigam Ltd.
(VSNL), is set to lose its dominance as more than 150
companies including British Telecom, MCI, Motorola,
CompuServe, and Sprint make plans to enter the
country's ISP market immediately.
The privatization of Internet-access services in India has
been discussed for more than two years and was
resolved by the Delhi High Court in July. The court
decided to allow India's Department of
Telecommunications to issue licenses to private ISPs,
opening the market.
Licenses for becoming an ISP in India are expected to be issued this month, but according to a government
bulletin, the government has slashed license fees for
ISPs and has permitted new entrants to set up their own
international gateways. The government has cleared a
proposal to levy a nominal license fee on ISPs.
New ISPs will be allowed to provide international
gateways after obtaining security clearances from the
Department of Telecommunications, according to the
bulletin. By allowing government organizations such as
the Department of Electronics to set up their own
gateways, the government has taken another step in
breaking VSNL's monopoly over international gateway
access.
The extension of the license period for an ISP from 10
years to 15 or 20 years will also be considered.
Meanwhile, VSNL is preparing for competition by
expanding and cutting prices. The extension of VSNL's
reach to a further 20 Indian cities, in addition to the six
currently served, will be completed by the end of the
year. VSNL said it expects to be to handling 300,000
Internet subscribers by the end of next year, nearly
three times more than the present level of 120,000.
VSNL has also cut Internet access charges for
leased-line customers by up to 33 percent.
"Although the Internet is not really the core area of our
company, as it represents a fraction of the company's
revenue, it is important to us in terms of the number of
customers we service," said Amitabh Kumar, the acting
chairman and managing director of VSNL.
"We have about 120,000 Internet users today, which is
jumping 10,000 to 12,000 a month." he said. The
monthly growth was more than 100 percent in some
parts of India, and VSNL will concentrate on improving
access in these areas, Kumar said.
Internet usage will grow 164 percent in India in the next
few years compared with a global growth rate of about
54 percent, according to a recent survey by
International Data Corp., in Framingham, Mass. About
62 percent of non-Internet computer users in the
country are expected to go online in about six months'
time, the survey said. [Nicer words were never spoken...]
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