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July 30, 1997


Let's play fair

VSNL may completely withdraw from Internet services business

Videsh Sanchar Nigam Limited Chairman and Managing Director B K Syngal has, in a letter to the Department of Telecommunications, indicated that his organisation is willing to pull out of the Internet service provision business completely and hand over its existing operations to the department.

The government-owned VSNL, India's monopoly commercial ISP, is directed by DoT. Even, as it has agreed to let go of its stranglehold on the ISP sector, an Internet policy, privatising Web access, is awaiting final clearance.

"In the wake of the private Internet service providers policy, we may pull out of Internet services if asked to," Syngal wrote. Alternatively, VSNL would prefer to spin off a separate division to handle its present Internet services. The letter is presently with the Cabinet and there has been no response from the Telecom Commission yet.

The action has been necessitated due to anxiety expressed by some hopeful Internet service providers about VSNL being both the gateway and a service provider.

The aspiring ISPs feel that these may lead to unfair practices. In the recently announced policy for ISPs, VSNL has been allowed a monopoly on the international gateway for at least two more years without any mention of when this might end.

Currently, despite its monopoly, VSNL has only 40,000 subscribers in the country.

The ISP policy document has been cleared by the Telecom Commission and is likely to be formally announced early next month.

The new policy now allows private operators to set up their own Internet access servers. But to connect to an Internet node these operators will have to go through the VSNL gateway. As these operators will be in direct competition with VSNL's Internet service, they fear that VSNL will use its international monopoly to restrict access or create other problems.

A major issue of concern for VSNL, according to sources, is that of voice telephony on the Internet. Some VSNL officials fear that this may be used for international calling bypassing its network. However, according to industry experts, this is a long way from happening as Internet calling is neither a mature technology yet, nor is it likely to be widely used in the next couple of years.

After prolonged delay, the ISP policy was finalised much to the relief of many of the country's email operators, and a few other telecom carriers who are hoping to provide Internet services in the country.

While email service providers have had to pay massive licence fees to DoT, the ISP policy states that there will be no licence fees for Internet services.

- Compiled from the Indian media

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