Two Mbps of bandwith must for every citizen

By Our Special Correspondent

BANGALORE, JULY 30. India can earn revenues of Rs. 48,000 crore from e-business services by 2005, according to a survey conducted by NASSCOM, the apex body of the Indian software industry.

The National Association of Software and Services Companies (NASSCOM) President, Mr. Dewang Mehta has said "In 2000-01, e- business services in India will account for Rs. 7250 crore of which Rs. 6700 crore will come from exports and Rs. 550 crore from the domestic market. This will be a 200 per cent growth over last year's revenues of Rs. 2500 crore."

The NASSCOM survey has revealed that besides the potential offered by e-commerce for Indian software exports, the impact will also be felt in the domestic market both in the B2B and B2C segments. E-business services in the Indian market will be Rs. 1,500 crore in 2001-02 and this may double to Rs. 3000 crore in 2002-03. While e-commerce transactions in 1999-2000 were valued at Rs. 450 crore, in the current year, NASSCOM projects a seven- fold increase to Rs. 3500 crore.

While appreciating the Union Government's recent policy initiatives centered around e-commerce such as the passing of the IT laws, the approval for 100 per cent foreign direct investment in B2B e-commerce ventures and zero per cent taxation of e- commerce, Mr. Mehtafeels that more needs to be done."

NASSCOM's Action Plan for boosting e-commerce growth has focussed on the following issues: the gap between the demand and availability of bandwidth has to be filled and the four elements of telecom infrastructure -- international, national long distance, last mile and satellite -- have to be enhanced. India should aim at providing two Mbps of bandwidth for every citizen in the next five years.

The apex body has recommended a three to five year moratorium of taxes on e-commerce transactions. It has suggested that India should support a permanent ban on taxes for Internet access and customs duties on electronic transactions. It is also necessary for international tax rules to be neutral, simple and clear.

Bandwidth at affordable costs is the mantra at NASSCOM. In India, the tariff ranges from $ 5000 per month for a 64 Kbps link to India from the U.S. and this has gone up to $ 35,000 per month for a one MB link. These rates need to be reduced drastically. The right-of-way allowed by the Union and State Governments (to access providers for laying optical fibre networks along highways) at the recent conference of 17 Union and State Ministers should be implemented within a two month time frame.

The association has recommended that the government should give a go ahead for 100 per cent FDI in the B2C segment as it has for B2B. Currently, telecom companies and ISPs are only allowed 49 per cent FDI, while IT companies are allowed 100 per cent foreign direct investment. The ISPs were more like IT companies and should be allowed the same facility.

The Government has also been requested to encourage the growth of Internet access through cable TV as cable penetration is higher than PC penetration. Cable TV figures are estimated to be around 37 million as compared to 3.4 million installed PCs. The government should amend the Copyright Act at the earliest to deal with "cyber squatting" and domain name disputes.

NASSCOM is the apex umbrella organisation of IT software and service enterprises in India. Its 716-member companies are estimated to collectively contribute more than 95 per cent of revenues of the Indian software industry.

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