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November 17, 1999
The last word
In the words of a battle-hardened IT executive, "Anyone who has a Web site claims he has a portal. So if someone says he's launching a portal, it doesn't bother me anymore."
Zee plans to launch its portal site, www.zeenext.com, in time to complement its Internet access provider service in Bombay, Bangalore and Delhi. The ISP, also to be called ZeeNEXT, is to be operational in Bombay, Bangalore and Delhi by March 2000.
With a bigger market in mind, Zee Telefilms has formed a cent per cent subsidiary, E-connect India Limited, to run its Internet services.
Sunil Jasuja, president and chief operating officer, E-connect India, says ZeeNEXT will deliver media content, including entertainment, music, video-on-demand, news and email.
"Zee already has extensive experience in entertainment programming and ownership of a large content base that we will use to our advantage," he said.
That Zee has. Its strong in-house programming network supplies software for its channel, Zee TV. Recently Zee entered the print medium with its magazine Zee Premiere that focuses on the film industry. Zee also has its own education channel, ZED.
Zee's portal hopes to have everything that any other portal on the Web does: email, chat, games, matchmaking, travel services, search, live news, BBS, education information, auctions, radio stations and Webcasting.
Zee hopes its access to its vast network already gathering programming software for its television and print channels will help push its portal too.
In a consolidated move, Zee will design the portal to complement its high-speed Internet access service. The portal will have video-on-demand and streaming music that will be accessible only for subscribers with a higher bandwidth.
Jasuja, however, rules out the possibility that Zee's portal geared for users with high bandwidth would put off those accessing the site over lines that provide considerably lower throughput.
Currently, there are about 600,000 Internet subscribers in India. Of these, 40 per cent are in Bombay, Delhi and Bangalore. This subscriber base is expected to grow to around seven million users by 2004.
Jasuja says the company hopes to target the metros and mini-metros, since that is where the market is expected to be largest in the next three-five years.
"We will launch with three cities in March and, by Q3 next year, go to the metros. By the end of 2000, we will be in the mini-metros."
ZeeNEXT will start its ISP services by initially providing access over telephone lines. Eventually it hopes to provide access through its cable network service, Siticable. With this in mind, the company has a pilot project going in Bangalore.
Zee claims it will start with a subscriber base of around 30,000 when it launches its service. By 2001, it expects the number to go up to 111,000 and hopes to have a market share of 18 per cent by the third year, its break-even period.
But the company did not reveal the pricing strategy for either its Internet access service using basic telephony or over the cable network. It also could not say what its USP would be in a market where there is no dearth of ISPs.
Zee's late entry into this market will be one of the biggest problems it has to contend with. It will not only have to fight the existing ISP monolith, the government-owned Videsh Sanchar Nigam Limited, but also contend with private ISPs who would have had a year's lead over it.
Zee hopes Siticable will help it out of that hole. Siticable, Zee's cable TV distribution network in 18 cities, has a subscriber base of nearly five million. If Zee can capture even a part of this ready subscriber base for its Internet service, it will have a decent chance. But there are still problems to be resolved, like the high cost of cable modems and the capital required to revamp the cable infrastructure.
Zee is, however, confident that these problems will be dealt with, by the end of 2000 at least.
Dinesh Dhir, who handles marketing services for Zee, said the company believes prices of cable modems will drop from Rs 15,000 now to around Rs 5000 in a year or two, and that a standard for cable modems will be worked out in another six months. That could further bring down the price of cable modems, he said.
But till that time, Zee hopes to manage its ISP service over the telephone lines.
Speed, Jasuja proclaims, will be the USP of Zee's ISP service. In the next six months the company plans to set up its own international gateway. Jasuja says that Zee's plan to be both ISP and content provider could work to its advantage.
"ISPs worldwide are adopting three business models. They are only access providers or content providers or they are both access and content providers. In India there are only access providers like VSNL and Satyam or content providers like Rediff and Indiatimes. ZeeNEXT will offer both the delivery mechanism and content," Jasuja says.
Zee plans to invest Rs 4 billion in infrastructure and content. It will also be entering into alliances with domestic and international content providers to gather content.
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