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DOT.COM 1ST ANNIVERSARY: ACCESS Is too much of a good thing a good thing? Bandwidth Blast It's the first mile, stupid. Before you get that rich, streaming, interactive and exciting content in your home, domestic bandwidth availability will have to be ramped up. Poor bandwidth continues to plague the nation. The pipes that lead the bits and bytes of data to servers located in the US will need to be really, really fat. That's what a brood of undersea cables and satellite companies are trying to do. Down the chain are myriad projects to set up state-wide internet backbones. With huge capacities on the anvil, will bandwidth prices crash through the pavement? What is not helping matters is the confusion about how much bandwidth India needs. By 2005, NASSCOM estimates that the aggregate bandwidth required by India would be 300 gbps. In contrast, Frost & Sullivan predict a bandwidth requirement of around 35 gbps by 2004. The bandwidth in India at present is 425 mbps or just 0.14 per cent of that. Both delivery mechanisms will find their niches-satellite is ideally suited for the mass media and undersea cable for high volume, real-time data. Satellite companies like Panamsat, Loral Space, New Skies, Thaicom, and Teleglobe are knocking on doors. For instance, New Skies sells 100 mbps bandwidth to a number of ISPs, including 60 mbps to Satyam. Says Sanjay Kumar, Regional Director, New Skies Satellite: ''Over the next one year, depending on another satellite being available, we could be selling five-to-seven times the bandwidth we are selling today.'' The undersea cable companies are also furiously adding capacity: Bharti-SingTel's 8.4 terabytes, Dishnet DSL's 2.4 terabytes are the prominent ones, but flag and SLW also have ambitious plans. The prospect of crashing bandwidth prices leaves these companies unfazed. Says Sunil Mittal, Chairman, Bharti Enterprises: ''Even if the prices go down and usage goes up, our revenues can be taken care of.'' Bharti will pipe 150 gbps from December, 2001, onwards. While all this should soon translate into a smoother ride on the information superhighway, the broadband scene is non-existent. Apart from the issue of demand, there's simply very little content. Says Pran Mehra, Country Manager of Band-X, a bandwidth trading company: ''The time and cost for deployment of the last mile will be the biggest hurdle. As more and more applications become frequently used, low quality bandwidth will become unacceptable.'' Counters Mahesh Uppal, a consultant to several telecom companies: ''There is very little evidence to show that premium offerings can take off big time as a paid service on the broadband network.'' Either way, surfers can only be happier. -Ashutosh Sinha Shake-out
ahead
Compounding minuscule advertising revenues, internet usage hasn't grown as fast as expected. Says Atul Kunwar, CEO, Mantra, ''The earlier growth rate was more a case of meeting the latent demand. As we penetrate downwards from the early adopter phase, the internet is expected to grow at a more normal rate.'' This has led to a desperate search for alternative revenue streams: application service providers, corporate networking, content development, broadband, and mobile-commerce. The most important revenue source appears to be the corporate services segment, with a special focus on offering virtual private networks or VPNs. Says Amitabh Kumar, Director (Operations), VSNL: ''By the end of next year, the share of revenues from dial-up access would drop to around one-fourth of the total revenues for the major ISPs.'' That's ambitious as, right now, approximately 38 per cent of VSNL's revenues come from dial-up access; the remainder comes from leased access, where VSNL recently slashed rates. Or take Sify, which gets 40 per cent of its revenues from corporate services, 42 per cent from access, 10-12 per cent from portal services, and the balance from cyber cafés. Clearly, for the smaller players (especially in the C category, with an average subscriber base of 3,000-4,000), the obvious option is to move out-or merge. There are those who predict this will happen over the next 6-8 months. ''Consolidation is definitely on the cards for ISPs,'' says Ramesh Ramanathan, President, ISP Division, Satyam Infoway. And the take on access rates? ''The present charges at Rs 5 are almost as good as free,'' shoots back Mantra's Kunwar. There goes the free ISP model. -Pooja Garg A guide
to access devices What's your device? With net-via-cable a reality-at least in parts of Mumbai, Chennai, and Delhi-that's a question surfers will get to hear quite often. Broadly speaking, there are three layers. The first is the low-end set-top with browsing facility. The second, the digital set-top box with full browsing facility and some interactive TV. And finally, a thin-client PC with full interactive TV capability, high-quality output and net access. While Samsung, Mantra, and Satyam are busy testing their own versions of set-top boxes, TMT Group is betting on the thin-pc. The Holy Grail is the magic price point. And then, there is that eternal question: will customers bite? To start with, a cable modem-which offers browsing as well as storage and downloading facilities-costs Rs 15,000. While most operators insist that prices will fall, and uptake will shoot up, it remains to be seen how fast this comes into play. Going by the ISP experience, individual surfers will wait and watch, though companies are clambering on. Low-end set-top boxes are better priced, at Rs 7,000, but the lack of downloading and storage facilities could be a problem for value-conscious Indian surfers. Finally, at the other end of the spectrum is the low-end pc (or high-end internet access device) which gives some pc-like features along with interactive TV and graphics-friendly browsing experience. Then, a beginning has been made in wireless access. Is that the Next Big Thing? -Pooja Garg
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The domestic internet service providers
(ISP) market is on death-watch. Survival is more important that access.
Fuelled by low entry barriers, and high valuations, the industry boomed;
today, there are a 100 ISPs operating in the country. Then, in a classic
case of supply exceeding demand, access charges fell dramatically-from an
average of Rs 20 per hour in 1998-99, down to Rs10 in mid 1999-2000 to
around Rs 5 right now. As things stand, there are only eight-to-ten
players with presence in more than 15 cities. ''Anybody who is not a
national player will find it hard to survive and therefore a shake-out is
certain,'' says Joe Silva, 37, Chairman, Caltiger, a Calcutta-based ISP
that is on its way to becoming an IP TELCO.