[India] VSNL Challenged By Another Govt Organization

["Irfan Khan" <KhanIA@super.net.pk>]

VSNL Challenged By Another Govt Organization 

By A. Nair
InternetNews India Correspondent 

[July 5, 1999--MUMBAI] The public sector behemoth Videsh Sanchar 
Nigam Limited may soon have to face competition from another 
government organization in its dominant role as a provider of 
Internet and gateway services. 

The Software Technology Parks of India (STPI), an autonomous 
organization under the Department of Electronics, is finalizing plans 
to enter the Internet access market and also provide connectivity to 
private Internet Service Providers (ISPs). 

The organization is planning a subsidiary to which these services 
will be transferred, while the STPI will focus on its core activity 
of promoting the software industry by providing incubating 
infrastructure and acting as a front end to the industry for 
government approvals. 

Confirming this, STPI director P.S. Narotra said, the plan will have 
to be submitted to the cabinet for final approval. The organization 
has already obtained Category A or a nationwide ISP license and hopes 
to start offering service to corporate and individual subscribers 
within a month's time. 

The STPI will supplement VSNL's efforts in providing connectivity to 
private ISPs. Connectivity has already been given to five private 
ISPs in areas where VSNL was not present. The STPI is uniquely 
positioned to enter this sector because it has been offering Internet 
services to export oriented software services since 1993. 
It operates 11 international gateways for software exporters and has 
22 agreements with service providers worldwide. 

The ISP policy announced in November last year enables STPI to extend 
its reach beyond software units. However, with the policy on security 
clearances still pending with the committee comprising 
representatives from the Department of Space and Department of 
Telecom, private ISPs like Satyam Infoway and Bharti Internet have 
put their gateway proposals on hold. 

The STPI has been able to take immediate advantage since it is the 
only government institution apart from VSNL which has gateways. 
The organization is currently providing international connectivity 
through Intelsat but plans to lease capacity on cables to augments 
its bandwidth. 

Part of the Rs 20 crore (US$ 4.6 million) earmarked for investments 
during the current year are to be utilized for the Internet project. 
On whether its rates would be lower than VSNL's existing tariff, 
Narotra said the cost of providing Internet connection was still very 
high because most of the content on the web was based in servers 
located at the United States. 

With the result that Internet traffic is mostly one-way - from India 
to the US - and until such time domestic content was generated, 
Narotra maintained that costs would not come down significantly. 
Besides, ISPs have to also get the mandatory nod from the Telecom 
Regulatory Authority of India approval before implementing any price 
drop. 

http://asia.internet.com/1999/7/0502-india.html