NET.COLUMNS: 10 Needs of the Indian Internet

The Internet Policy, as approved by the Cabinet on Monday, calls for a
5-year licence fee holiday and a 10-year licence period. Good
Beginning. A bank guarantee of a year’s licence fee is to be
given. Bad Idea. The licence amount is to be determined in a joint
meeting of the DoT with leading trade organisations. The bank
guarantee condition will effectively eliminate the small-time
entrepreneurial outfits from becoming ISPs, and make the ISP business
the domain of big business.

It would have been nice if the approved document were available on the
Net. Especially since, all newspapers had their own flavour of the
story. It would have been still better had Internet users in India
been allowed to comment on the guidelines being drafted. But then,
policy makers do not necessarily surf the web. Else, the Indian
Internet wouldn’t have been where it is now.

Everyone likes lists! So, here’s one for the Indian Internet. Its what
we — the people, the government and corporates — have to enable to
ensure that the Internet can herald the revolution which it is capable
of, and which India needs.

1. Backbone

We need a high-speed backbone in the country. The recent announcement
raised the speed of the (paper) backbone to 2.5 Gbps (currently, VSNL
has 512 Kbps circuits linking the major cities). The cost was raised
by Rs 500 crore to Rs 1,200 crore. Great PR. How about getting it
done? We’d be delighted with 45 Mbps connecting India’s top 50
cities. Else, of course, next year, we can raise the speed to 50 Gps
and the cost by another Rs 500 crore.

2. Toll-free access

After the proposed reduction in the rates of VSNL’s service from Rs 30
per hour to Rs 20 per hour, guess who will make more money from the
Internet than VSNL? MTNL/DoT. With one call every 3 minutes, and each
call costing Rs 1.40, the connect-time cost works out to Rs 28 per
hour. The telephone call cost is, in a way, a hidden cost and not very
obvious to many. And if you aggregate it, it is not a small windfall
for MTNL/DoT. 50,000 users spending an average of an hour a day (250
hours a year) can add Rs 35 crores to revenues. How about using this
money to making access easier by re-investing it in adding more phone
lines and switches?


For sometime now, ISDN access has been coming. At 64/128 Kbps, it is
an excellent access method for corporate networks not wanting to spend
large amounts on leased lines. ISDN will also improve the quality of
connections that users get.

4. Reduced Leased Line Costs

VSNL should drop corporate 64 Kbps leased line port charges from the
present Rs 10 lakhs to between Rs 2 and 4 lakhs. DoT needs to halve
its separate charge of Rs 1.87 lakhs for the line. Make leased lines
available within Rs 5 lakhs per annum (with a monthly payment
facility), and reduce the lead time for setting up the leased lines to
2-4 weeks, and see business usage of the Net take off.

5. Rock-bottom ISP Licence Fees

The big question is what the bank guarantee amount for ISPs will be.
How about zero? Companies are going to anyway spend plenty of money on
equipment, telecom and marketing. Why bother with the bank guarantees?
If ISPs have to fold up, let them. Let the market decide. But, lets
have the small-time ISPs also: one for Connaught Place, one for
Nariman Point, one for Raheja Arcade, one for Udhampur. Let them take
the bandwidth from the big chaps, but surely, let’s not make them pay
the bank guarantees. They will not be able to. We need a grassroot
awareness and marketing campaign to get millions of Indians on the

6. ICOs

How about Internet Kiosks at post offices, banks, railway stations,
airports, petrol pumps and libraries? Just as the telecom revolution
was energised with the Public Call Offices, the Internet revolution
needs ICOs. Checking email, news headlines, stock quotes, cricket
scores and ordering books, flowers should be as simple as walking up
to one of these terminals. In India, the PC cannot be the primary
access point, because of the cost of ownership, the complexity and the
insignificant installed base in homes. ICOs and WebTVs can help create
the mass medium which marketers need.

7. A 24-hour India news service

India needs an electronic, Web-based 24-hour news channel. News is a
big attractor, and being able to get the latest news via the Net
during the day (there are very few TVs at the workplace) can work as a
good reason for corporates to go in for the Net. Airlines and the
Railways need to put up their schedules and arrival/departure
information, near-real-time stock quotes need to be made available for
free, along with more locally relevant community events.

8. Interactive Websites

Companies need to go beyond putting up information; they need to make
the web a service and transaction medium. ICICI Bank has taken the
first step by announcing plans to offer Internet Banking. We should be
able to buy books, order CDs, books tickets, pay the telephone and
electricity bills and trade stocks. Companies need to be able to build
in enough interactivity and offer relevant, personalised information
and services to make it a worth our while to visit their websites.

9. Electronic Payment Systems

Money needs to move electronically. Via credit cards and bank
accounts. Once money starts moving, merchants will start setting up
shop. And then the Net’s virtues of geography-independence and
interactivity will create the ultimate marketplace.

10. Venture Capital

We need companies willing to take risks and back people and ideas.
Starting a Net business does not need a lot of capital. But there
needs to be potential to make it big, and be acquired. Given India’s
strengths in English and software, some innovative funding can help
make the Internet boom. Also, employee stock options need to be
allowed in a more direct manner than the ways possible at present.

Published by

Rajesh Jain

An Entrepreneur based in Mumbai, India.