Dishnet looking for foreign tie-up

MUMBAI, MAR 27: Chennai-based Dishnet Limited, which launched internet services at rock-bottom rates in Pune last week, is scouting for a...

MUMBAI, MAR 27: Chennai-based Dishnet Limited, which launched internet services at rock-bottom rates in Pune last week, is scouting for an overseas partner. The firm is a 100 per cent subsidiary of Sterling Infotech Limited, owned by NRI businessman C Sivasankaran.

The internet service provider ISP already has technology partnerships with Microsoft, Compaq and Intel and is now looking for an equity partnership which can bring in both telecom expertise and finance to the joint venture. The partner is likely to be a telecom company or ISP operating from the US or Europe. It will hold a minority stake of 49 per cent in venture, as per the guidelines laid down in the ISP policy. quot;We want to have a strong backing on quality. A financial commitment brings a long-term commitment even in terms of technology,quot; said Prakash Arya, marketing director.

The task of finding the right partner has been entrusted to Communications Equity Associates, the US-based investment bank specializing in media, telecom andentertainment sectors. Three companies have already been shortlisted and negotiations have progressed into the second round, a top official said. A final decision is expected in the first quarter of the next financial year, after which Dishnet will apply for Foreign Investment Promotion Board approval.

This makes Dishnet the first ISP with foreign equity partnership. The foreign partner will bring in around Rs 80 crore to Rs 100 crore to the venture, Arya said. Dishnet is investing a total of Rs 400 crore in setting up ISP infrastructure and marketing the service. It has also applied to the IFCI for a Rs 75 crore loan to fund its expansion plans.

Unlike the other ISPs, Dishnet is targeting volumes aggressively by slashing prices. Its all-time low introductory offer of Rs 10 per hour of internet in Pune has already given it 2,500 subscribers within a week of the launch. quot;We are looking at 5,000 subscribers in two months from Pune alone 8212; this more than what VSNL has got in three years,quot; Arya said.

InChennai, it plans a much more aggressive package at Rs 3,300 for a 5-year account where one hour of surfing will be free every one day. This is approximately Rs 2 per hour of internet. The ISP is not stinting on bandwidth either and will a have 34 Mbps link at Chennai, 4 Mbps at Pune and 8 Mbps at Mumbai. It is currently developing its website eth.com as a portal.