MUMBAI, AUG 31: International carrier Videsh Sanchar Nigam Ltd is planning to set up web farms in India to encourage domestic content providers to host their sites in the country. The proposal will come up for approval at the next VSNL board meeting and is likely to bring down costs by a factor of ten, acting CMD Amitabh Kumar said at the "e.biz India '99" show on Tuesday.The web farms (locations where a large number of websites are hosted on servers) will be set up in three cities in India - Navi Mumbai, Pune and Chennai. Currently most sites including that of the National Stock Exchange are hosted in the US. According to an internet company in the hosting business, hosting a site in India currently costs Rs 6 lakh as compared to Rs 2 lakh in the US. "It makes better sense for us to locate our server here but costs are high," the company said.Since most of the content is hosted in the US, traffic is one-way. Almost all of it is from US to India and there is hardly any from India to US, with the result that VSNL has to pay for both ends of the circuit. VSNL incurs an average cost of Rs 2.5 crore on a 2 Mbps link and is not even recovering its costs after the revised leased line tariffs took effect, Kumar said.The new tariff structure notified by the Telecom Regulatory Authority of India takes into the consideration the lowest price at which VSNL has obtained bandwidth. A 2 Mbps line costs companies Rs 41 lakh.Responding to a query, Kumar said internet could be free if access providers (DoT/MTNL) were ready to share revenues from surfing. "Advertising alone cannot sustain it. If the Rs 24 per hour telephone charges can be shared, it is possible," he added.Rediff on The Net founder and CEO Ajit Balakrishnan estimated free internet was at least nine months away in India. He said there was very little content relevant to India on the net. "The high cost of leased lines until recently was a prohibitive factor," he said. Advertising revenue from the net was negligible since less than 0.5 per cent of Indian advertising was on the net. "For all the hype we have only one million internet users in the country," he said.Regarding the response to online shopping services at the Rediff site, he said for every 100 surfers only two bought online. Around 90 per cent of these buyers were male and mostly in 25 to 35 years age group. Statistics showed the trend was similar in US. He said free internet was at least nine months away.A study by Rediff had shown that cybercafes were emerging as an important point of internet access. In Mumbai, around 25 per cent of net access was through cybercafes and in Bangalore, 45 per cent.Hewlett Packard India president Ganesh Ayyar said the cost of PCs had not fallen significantly because monitor prices had not dropped correspondingly with that of other computer parts.
