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`Internet -- still a long way to go'

Kripa Raman

MUMBAI, June 23

THE Internet is not faring too well in the country and opportunities for dot.coms are very limited in the Indian market for some time to come, according to Mr. Amitabh Kumar, Director, Operations, Videsh Sanchar Nigam Ltd, market leader among Internet Se rvice Providers in the country.

``The market had been static for the last four months at around seven lakh users in the country,'' said Mr. Amitabh Kumar, speaking to Business Line.

``There is a lot of shifting of users happening between ISPs,'' he added. ``In particular, nothing is happening in the smaller towns.''

VSNL's monsoon June package which offers free use in the night hours has brought in an additional 45,000 users, claimed Mr. Kumar. This has brought VSNL's Internet subscriber to four lakhs.

But even taking into account current additional users among all ISPs, the best case projection, according to him, does not show a user strength of more than eight lakhs, the subscribers of private and other ISPs included.

Unless the user base rose quickly to touch the 25 lakh to 30 lakh figure, not only the Business to Consumer (B2C) dot.coms, but many ISPs themselves would not be able to survive, said Mr. Kumar.

The figure of eight lakh Internet users is lower than the 12 lakh mark that recent reports have suggested.

Some of the ISPs are not reporting correct user figures either, said Mr. Kumar. (All ISPs at present go through VSNL). He said that while ISPs were slashing Internet access rates, the cost of access to the consumer had not significantly decreased, the in hibiting factors being Personal Computer costs as well as telephone charges.

``Although telephone services have cut costs to around Rs. 16-17 per hour by reducing the chargeable pulses, Internet use will pick up only if the cost falls to between Rs. 5-10 per hour,'' said Mr. Kumar.

Even Internet channels being offered through the cable route would eventually have to charge Rs. 2,000 per user per month if they are to sustain themselves; this does not offer much potential to create a large user base, said Mr. Kumar.

Mr. Mohana Pillai, Chief Executive Officer of ISP Pacific Internet, while ``personally holding that Internet user base is growing very fast'' agreed that it should be ``growing much faster.''

``The cost factor and infrastructure are not keeping pace. The customer is also very confused,'' he said. ``You suddenly have 20 to 30 people all claiming to be more or less the same, and the customer believes none.'' And unreliable ISP services and poor telephone lines only add to people's suspicion.

He said liberalising all issues pertaining to the Internet would instantly generate more users. ``China is a good example, it has four million to six million users of the Net, while we, a nation so much more familiar with English, the most common languag e of the Net, has not even touched the one million mark.''

The Internet access cost is only a small fraction of total Internet usage cost, said Mr. Pillai: ``And ISPs are slashing each other's throats over this small fraction. A majority of the ISPs will not have the depth to wait out.''

The other important issue here is that regulation is too tight, said Mr. Kumar of VSNL. Companies cannot get into different areas, some can get into cellular, some into basic services, some into long distance, and so on. And all this made for too many re gulations.

Meanwhile, he said there are not enough users ``to look at all the dot.com sites that are coming up.''