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The Mahanagar Telephone Nigam Limited will provide Internet services in New Delhi and Bombay at half the present cost.

MTNL will charge "very affordable" rates by offering various package deals for its existing telephone clients.

"We plan to offer tariffs so low that even an average person would be able to surf the Net without having to worry about high bills. The tariff would be packaged for different usage groups starting from 100 hours per year," said MTNL Chairman and Managing Director S Rajagopalan.

Videsh Sanchar Nigam Limited, the sole Internet service provider in the country, charges up to Rs 10,000 for 500 hours of online time.

On Friday, MTNL, which provides phone services in the two metros, signed an ISP licence with DoT.

MTNL plans to invest Rs 1 billion in setting up Internet infrastructure in the two cities and building up a base of 200,000 subscribers in both the cities by the end of next year.

This will include setting up two gateways of its own with 155 MBPS links, costing around Rs 300 million each in the two metros in addition to the two VSNL gateways.

Rajagopalan said that MTNL, which is slated to provide Internet services from January 26, would not go in for high initial deposit of Rs 15,000 as was being charged by VSNL.

"We will charge the same that we do for providing an ordinary phone connection which is around Rs 3,000," he said.

Besides, Rajagopalan said, MTNL Internet subscribers might not have to pay for the phone units used for accessing the Net.

"Today, Internet subscribers pay two bills for using the Net - one to VSNL for Internet usage and the other to the Department of Telecommunications or MTNL for using the phone lines. We plan to give the two bills together but may deduct from the phone bill the time our phone has been used to surf the Net," he said.

The company is working on various tariff packages aimed at making it among the most inexpensive Net provider in the country.

MTNL's move to give credit to its phone subscribers is expected to be viewed as a strategy to keep its phone subscribers as well as building up a huge Internet clientele.

Hughes Ispat, a private basic telephone operator, has launched services in the Maharashtra telecom circle, threatening MTNL's monopoly.

Anticipating greater competition from various private service providers over the past few months, MTNL is moving towards becoming a total telecom company that will offer basic, cellular, paging, ISDN and now Internet services.

Rajagopalan said that for connecting to the Internet traffic internationally, MTNL is expected to tie up with Canadian company Teleglobe. The foreign partner is likely to offer competitive rates compared with other international companies like AT&T and MCI.

About the quality of service, he said, "We plan to have a port ratio of international standards, which is 1:10. This will avoid congestion and jams faced by existing Internet subscribers. From the initial 480 ports in two POPs, or points of presence, we don't intend to service more than 5,000 subscribers," Rajagopalan said.

MTNL has already shortlisted several companies like Digital, Wipro, Datacraft, HCL Infosystems, Tata Infosystems and Microland for placing orders worth around Rs 90 million for the equipment within then next few days.

The entire plan is to be executed in two phases.

In the meantime, major Indian business groups, including the Nandas, the Modis, the Mittals (Bharti Group) and the Rais (Usha Group) have undertaken a feasibility study to become Internet service providers.

This week, the Bharti Group will be submitting its application for a 'Category A' (all-India) licence under Bharti BT Internet Limited, Bharti Telecom's joint-venture company with British Telecom.

Vijay Rao, CEO of Escotel, an Escorts Group company, said the Internet is a business with a long gestation period and it is important to gauge market potential before taking the plunge into this business.

"It makes strategic sense for us to be an ISP as we are already in the telecom sector. We have begun serious analysis of the market potential and will take a decision soon," he added.

Umang Das, CEO, Modi-Telstra, a B K Modi Group company, said his company is also interested in getting an ISP licence. "The licence terms and conditions are very lucrative but as the market forces will determine the trends, we need to do our homework well. We would be interested in getting an ISP licence as it integrates our operations. However, groundwork needs to be done before we can decide finally. We are impressed by the government's commitment and would like to see such action in other fields as well," Das said.

Navaid Khan, senior vice-president, Koshika Telecom, an Usha Group company, said Internet is a part of IT and as the group already has a separate focus in this sector, it makes sense for them to integrate their operations with the Internet and its usage in India.

Akhil Gupta, CFO, Bharti Group, added, "We had decided to get an ISP licence long ago and we are in the process of completing formalities to get a 'Category A' licence. We will be submitting our application within a week," he said.

Even the solution providers and the equipment suppliers are carefully evaluating market potential this time. HCL, a major software firm, has already set up its Web site to provide Internet solutions and is now analysing market requirements.

Sharad Talwar, spokesperson, HCL, said the company has long evaluated the need for solutions that ISPs would require and have designed its Web site for giving out information to new ISPs on the support and applications required to offer services.

Earlier:

• We have run out of headlines!
  Finally. After several announcements, reports and headlines, the Net business has been thrown open to the private sector.

- Compiled from the Indian media

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