Centre clears the way for a virtual war

While individual strategies are yet to be formulated, private ISPs are confident about carving their niche by playing the quality card and presenting a broad range of Internet applications. Survival, however, will depend on how much and how fast each ISP can invest in the enterprise.

According to Global’s Regional Head (Business Operations) Sanjeev Verma, the company expects to commence operations in Vadodara within 45 days of acquiring its licence.

Unwilling to reveal its plans further, he said, “We plan to demarcate business into the retail and corporate segments; the former will offer the simpler facilities like browsing, while E-Commerce hed: vibztrn takes priority in the latter group. As of now, one can only affirm that the consumer segment will be dealt with separately and that we are changing focus to E-Commerce.”

City-based Planet Internet, meanwhile, hopes to take the big leap within 10 days of being licensed. Said Web Master Jaspinder Singh, “We have all the infrastructure in place and should be able to offer dial-in facilities in no time once the licence comes through”.

While Singh anticipates about 2,000 subscribers including individuals, firms and corporates, Verma, “going by the national perspective”, expects a 10,000-strong customer base. Market sources, however, point out that the number of subscribers may not imply a greater success rate.

“Local ISPs may win more subscribers in their respective cities in terms of number of connections given. However, the big players will adopt a revenue over count approach, most focusing on high-investment areas like E-Commerce. Thus, the target will be a select market — the corporates — with the aim of capturing a stronger, sustained revenue base,” said a market watcher, requesting anonymity.

Because of their free hand on tariff, private ISPs are likely to be an expensive proposition in comparison to VSNL. “True, subscribers may be required to pay 5 to 10 per cent premium for the private services. But considering that quality and speed are guarantees most private ISPs will offer, the price is unlikely to decide the response. Also, there is little chance of the VSNL nodes reaching smaller cities till 1999”, said Singh.

With no limit on the number of applicants for ISP licenses, there is little doubt the market will soon be swarming with service providers. But how many will survive the contest? “Only a handful,” said Singh, adding, “Becoming an ISP is no easy task, considering the stupendous investments. All ISPs will need a recovery period of at least three years and many may not recover even a fraction of their stakes. That will decide who stays and who goes”.

Verma agreed: “This remains a high investment area in terms of hardware and money will be the determining factor. We have already invested Rs 100 crore and have to dole out more to keep going.”

Also in the offing are overseas alliances, thanks to the nod to 49 per cent foreign equity in joint ventures with Indian ISPs. Global, which has a strategic alliance with Microsoft, is poised to become an international gateway.