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July 28, 1999


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The moving target: Dishnet has postponed its Bombay launch twice. But this time it is determined. Priya Ganapati

Dishnet Limited, the cheapest Internet service provider, is finally set to open shop in Bombay on September 13, Ganesh Chaturthi day.

The launch date comes after a delay of nearly four months after the missed deadline of May 1.

Email this story to a friend. Dishnet, a 100 per cent subsidiary of Sterling Infotech Limited, initially started ISP services in Pune on March 18 this year. That was followed by launch of services in Madras on April 14.

The May 1 deadline for beginning operations in Bombay was supposed to be followed by a New Delhi launch in June. Then by the end of the year, Dishnet had planned to spread services to Bangalore, Calcutta, Hyderabad and Ahmedabad.

But schedules for all the launches have gone haywire.

Bombayites, especially have been eagerly awaiting Dishnet because of the rock-bottom tariff rates it has to offer. Internet industry people have also been anxious for Dishnet's launch in high Net density areas because it has the potential of sparking a price war among ISPs.

Then what has been going wrong?

Here's a numbered list in chronological order...

  1. Delay in delivery of networking hardware by Cisco.
  2. Delay in acquisition of MTNL phone lines for its modem banks.
  3. Financial crunch caused by ambitious expansion plans.
  4. VSNL officers discussing business with Dishnet leave.
And the low-down...

The launch in Bombay and New Delhi was first postponed from May 1 to sometime in the third week of July.

The company was to procure hardware equipment like routers and switches from Cisco. Dishnet sources then had revealed that delay in shipping the equipment was one of the reasons for missing schedules.

Dishnet's other reason for the delay is something that every private ISP has been complaining about: Delay in providing telephone lines by Mahanagar Telephone Nigam Limited and the procedural delays of the Videsh Sanchar Nigam Limited.

MTNL was, until recently, the government owned basic telephony monopoly. The VSNL is another government monopoly over the overseas telecommunications business and until recently the only provider of international Internet gateways.

A few months ago the Internet Service Providers' Association of India had even filed a complaint against MTNL and VSNL.

In the written complaint to the Telecom Commission, the communications ministry and the Telecom Regulatory Authority of India, the ISPAI had alleged that VSNL and MTNL were obstructing operations of private ISPs.

ISPAI Secretary Amitabh Singhal had then told Rediff "There are a lot of bottlenecks that private ISPs are facing in terms of getting more lines. There is also a delay in processing the different applications. We have demanded that greater priority be given to requests by ISPs."

Though relations between MTNL, VSNL and the ISPs have since improved, sources in Dishnet complain that procedural delays and bureaucracy is throwing their schedule out of sync.

An executive with the company told Rediff that "Things had improved with MTNL and we have got the lines we want. But with VSNL there was a problem at the management level we were dealing with. A few officers, who we were dealing with, were transferred. So that led to some delay."

The sources say that the company has been experiencing a financial crunch because of its rapid expansion plans.

"The chairman of our group, N Sivasankaran, has a stake in the Tamil Nadu Mercantile Bank. Yet, the bank was not able to give some money that we wanted so there was a problem with the finances," a source in the company reluctantly revealed.

Dishnet plans to invest Rs 4 billion in its ISP business and hopes to break even in the third year of its operation. The company has set a target of 200,000 subscribers by 2000. Today, it has a combined subscriber base of about 8,000 only in Pune and Madras.

Dishnet has ambitious plans of setting up its own backbone network across the country but currently uses VSNL's gateway.

Though the guidelines for setting up international gateways have finally been announced the company does not plan to establish its own gateway immediately.

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