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September 24, 1999
Power failure fails to deter Amitabh KumarPriya Ganapati at Pragati Maidan
At noon today power collapsed plunging the conference halls into complete darkness. For around ten minutes it was pitch dark, punctuated only with little dots of florescent lights radiating from cell phones switched on by panicky delegates.
Caught in this was Amitabh Kumar, director, operations, Videsh Sanchar Nigam Limited. Kumar was scheduled to deliver a session on issues and challenges before the Indian Internet service providers.
With his notebook booted and ready Kumar was waiting for the audience to troop in when the power failed. "Now, the computer and the slide projector will have to be booted again!" said an exasperated Kumar.
Thankfully the battery-enabled laptop didn't have to and when the power was restored ten minutes later Kumar got on with his presentation.
Despite his star status as the former acting chairman and managing director of VSNL, Kumar's session was poorly attended.
Till November last year, when the first private ISP launched its services, VSNL was synonymous with Internet in the country. The history of VSNL's ISP services is mostly the history of the Internet in India thus far.
Internet services were launched in India in 1995 with VSNL as the monopoly service provider. Since then Internet has grown fairly rapidly with over 30 ISPs operational today and a total subscriber base of about 500,000 users.
Today Internet access rates in the country are quite expensive. Even Kumar admits high tariff rates are one of the biggest barriers blocking the growth of Internet in the country.
Kumar reveals "It costs Rs 40 per hour for subscriber to access the Internet. The access charge to be paid to DoT or MTNL is around Rs 24 per hour while access charge to be paid to the ISP is around Rs 16 per hour. This is too high to sustain good Internet penetration in the country."
This, Rs 16 per hour tariff paid to the ISP, includes the price the ISP pays for international connectivity, backbone access network marketing costs and billing costs.
Kumar pleaded, "This price doesn't have much scope for reduction. ISPs are already done to the bare bones here. What needs to be reduced is the high access charges paid to the telephony operators. These high charges are because of the lack of competition in the basic services sector."
The sale of PCs in the country has slowed down this year. This has also affected the Internet penetration in the country.
"There is also not much awareness when it comes to Internet in the small towns and cities. Even students don't know that they can get a TCP/IP connection for Rs 1,000. That is very cheap. An outing in the evening or even a pizza party costs more!" Kumar said.
He warned ISPs that it is difficult to make money in this sector unless you have a subscriber base of around one or two million.
Kumar blamed the high cost of Internet access in the country on the fact that most content accessed by subscriber is not based in India.
"We have to bring content into this country if we want to reduce the prices that ISPs pay for international connectivity. Eighty per cent of access is to international IP addresses. US ISPs pay $3,000 per month for a 2 MBPS link while Indian ISPs have to pay $18,000 per month for the same. This is because most content is based in the US and US ISPs have low access costs for that," he explained.
Kumar hopes that the national backbone network being built by DoT will be up by the December this year or at the most March next year. This would ease domestic connectivity problems, as it would supplement VSNL's existing backbone.
Kumar said that ISPs should aim to double or triple users on the Internet in another two or three years if Internet penetration has to take off.
He assured delegates that VSNL's value added services are completely Y2K compliant while its telephony services will be compliant by the end of this month.
Kumar reveals that with the growth of Internet in the country the surfing patterns of users have also changed. "We are noticing a shift from simple surfing and chat to multimedia downloads like video clips and MPEG files. This is going to impose bandwidth demands on ISPs and it will increase the bandwidth allotted to each consumer by a factor of 5 to 10."
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