Internet Service opened up for Private Sector

Putting an end to the state monopoly for providing internet services, the government of Indian has opened up this sector for private companies. Till now Videsh Sanchar Nigham Limited (VSNL ), a government-owned company, had the exclusive right to be the Internet service provider in India. The opening up of the sector is expected to bring in competition and better services to the customers.

A section of the industry, however, feels that the policy is still giving protection to the VSNL. According to the new Internet policy, there is no license fees on Internet Service Providers for five years. This also means that the ISPs will have to go through VSNL for international Internet access, using the VSNL gateway and will be paying VSNL for the bandwidth.

This may result in the tariffs being charged by the private ISP becomming not very different from what VSNL charges at present. The ISPs will also have to pay for the phone lines which is again owned by another state monopoly - Mahanagar Telephone Nigham Limited (MTNL). Till now the connectivity costs of the phone lines to be charged by the MTNL and international Internet access charges to be paid to VSNL are not known. The ulitimate price which a customer may have to pay to a private ISP is not yet known.

A section of the industry says that by protecting VSNL the government has aborted the chance of creating additional bandwidth and a reliable and affordable data communications backbone in the country. As things stand now, the dependence on VSNL for the gateway is going to stay for some more time.

Mahanagar Telephone Nigham Ltd (MTNL), the state monopoly for telephone services in the metropolitan cities, is planning to become an Internet service provider from January next year. MTNL proposes free-call Internet access service in the company's ISP plans. MTNL would not charge for the telephone tariff while a subscriber is connected to the Web. Under the present terms offered by VSNL, to access the Internet, one has to stay on the public telephone network and pay local call charges.

Internet growth in the country should be understood in the light of the low telephone density in India. It is 1.2 per cent against the world average of 10 per cent. None of these factors seems to have completely shattered the hopes of the private companies. The aspirants right now include Satyam Infoway, Tata IBM, HP India, Datapro, Digital, Sprint RPG, GE Capital, and Crompton Greaves, among many other lesser known names.

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