The VSNL divestment process gains momentum, while Spectranet talks M&A with Bharti Group. Quietly, Aptech Internet eyes the rural access markets in an age of acquisitions.

By Nitya Varadarajan 

e-lead

The government announces a minimum net worth barrier of Rs 2,500 crore for the sale of 25 per cent of national telecom carrier and ISP market leader VSNL. That's small fry for the potential bidders, the biggest names in domestic and international telephony. Says Amitabh Kumar, Director (Operations), VSNL: ''In view of the emerging competitive environment with the next 12 months, it is essential for VSNL to move out of the shackles of being a PSU.''

• Reports indicate that a takeover deal is being etched between the Bharti Group and the Punj Lloyd-promoted broadband services provider, SpectraNet, which has laid 600 km of fibre optic cable in Delhi and Bangalore.

e-clips

• Savio Chow, Managing Director and Vice-President of Yahoo! Asia operations (excluding Japan and South Korea), resigned recently, on the heels of another high-profile resignation by Fabiola Arredondo, Managing Director of Yahoo! Europe.

• The shakeout in the womens portal space continues. BT learns that ICLEO is in the market for a merger or a sell-off, or might even align itself with a horizontal portal. The site has scaled down operations.

• Bangalore-based CustomerAsset, an ECRM company, has acquired TeleWeb Worldwide, a US-based company primarily focused on outsourcing customer service and sales to India from US telecommunications companies. The acquisition was an all-stock deal. Says K. Ganesh, CEO, CustomerAsset: ''We believe it is critical to have a vertical market focus. Besides telecom, we are also focusing on financial services, tech support, and retail.''

• In a bid to latch on to the NRI market, auction site baazee.com has acquired bollywoodauction.com. Baazee says the all-stock deal is a forerunner of more to come.

e-supplement

• While the stock-market is clearly unhappy with Aptech's decision to demerge its training and software businesses, Aptech Internet has been chugging along-sans fanfare (or shall we say TringTring?). Aptech Internet recently launched its ISP service in Chandigarh and plans to hit Baroda, Rajkot, and Surat in the first week of March. Up next is Nagpur, Nasik, and Ahmednagar in Maharashtra. The bottomline: in the next six-to-eight months, Aptech plans to increase its coverage to about 60-80 towns all over India.

Note that these are, by and large, smaller towns, a conscious strategy. That also explains the absence of huge spends on marketing and publicity. Says Arvind Nair, President and MD, Aptech Internet: ''As Aptech is present in 700 towns, it is easier to market thanks to a strong brand recall. Also, in the net economy, the ability of an organisation to run big budget marketing programmes is an expensive way to acquire customers.'' 

LAST MILE
Homeward Bound!

While the jury is still out on whether Digital Subscriber Line (DSL) will usher in a broadband revolution, in pops Banyan Networks with a new product: DIAS (Direct Internet Access System), which was produced in association with IIT-Chennai. The DIAS solution is based on high bit rate HDSL technology, which provides symmetrical high-speed access using the existing tele-cable network.

Ergo, voice and data over the same telephone line, with up to 2 MB of data. When the telephone is in use, the data rate drops by 60 kbps. The solution connects directly to the ISP, saving the subscriber the dial-up costs-and also diverts data traffic, preventing the PSTN exchanges from choking due to data traffic. One DIAS node costs between Rs 15 lakh to Rs 30 lakh, depending on the number of ports.

Both private and state telcos are excited. MTNL has conducted extensive trials on DIAS, placing orders for some systems. dots in some centres-Pune, Trichy, among others-have also conducted pilot trials and are helping Banyan get certifications of approval for the equipment before bulk orders can be placed. The technology is currently in use in townships such as BHEL (Trichy), TISCO (Jamshedpur).

Currently, dot and MTNL are planning to offer the services free of cost to the subscriber. In turn, they will levy competitive (around Rs 1,000 a month) internet usage charges. As telephone bills would be restricted to actual voice usage only, this brings about tremendous savings compared to conventional dial-up access. Would the public TELCO giants be willing to forego the current benefits of getting telephone revenues from internet usage? Yes, says Banyan CEO Vijay K. Raghavan. ''They have realised that they are sitting on a gold mine in the form of copper wire. They also know that they can more effectively retain their telecom customers for the internet by giving them a separate channel.''

Private players are also looking at the technology. Hyderabad-based Online Media Solutions has started using the DIAS equipment, and has already deployed the system in Banjara Hills, where there are multiple subscribers. ''DIAS is the most cost-effective, tailored for rugged Indian conditions, and allows for fast and equal speeds of downloads and uploads,'' says C.H. Rao, Online Media Solutions' Vice-President (Operations). The company plans to buy more than 100 DIAS systems and link up 100 cities and towns in Andhra Pradesh. Typically, cable operators-it has a network of 25,000 cable operators-will levy a one-time installation charge of Rs 3,000 and collect a monthly revenue of Rs 750, of which 60 per cent will be remitted to Online Media Solutions.

Where does that leave Dishnet? The company is currently laying the last-mile connectivity of copper from its D-Slam hubs at its franchisees as it cannot use dot's copper. While Dishnet has been proactive on the price front, software professionals have accepted ADSL technology with reservations about equal speeds, incoming and outgoing. ''What BSNL/ MTNL will do is still in the future, but Dishnet is already present,'' counters a Dishnet spokesperson.

In any case, the quality of decades-old copper wire remains a question mark staring at the broadband dream. 

-Nitya Varadarajan

INTERVIEW
"We will collaborate with online brokers"

Anupam Gupta, CEO, debtonnetindia.com-a virtual marketplace for wholesale primary debt promoted by IL&Fs and the NSE-chats with BT's Roshni Jayakar

Q. The offline debt market hasn't been sparkling; whither debtonnetindia? 
A. Although the portal has been active for about six months now, it has already crossed volumes of over Rs 3,000 crore. There are about 200 registered institutional users on the site, who access quality content, as well as participate in debt issues. Ultimately, it would be linked to web-enabled banks and clearing systems to enable electronic payment and settlement.

Aren't there other marketplaces in the same space? 
Yes and no. There is emecklai and icicimarkets, but they focus more on the information side. Which is not to say they cannot move onto the transaction side.

And revenues... 
The primary revenue model is based on hosting fees. Moving forward, we anticipate that when volumes build up, registered users would be charged subscription fees for accessing value-added content and transactions through the portal. The current model is an online one.

Is there scope to extend this portal to retail investors? 
The current plan envisages appropriate coverage of the institutional and semi-wholesale segment of the debt market. We are not looking at it as a pure b2c kind of play, but will collaborate with online brokers who would become aggregators.

WEB LABS
Testing...

Please deposit your website's samples at 7 am! Boutique web labs-which promise to test the performance of your website-are romping into the Indian market. Ask ReadyTestGo, the subsidiary of Cybernet Software System, which has been servicing the market around its three labs, at San Jose, Singapore, and Chennai, since June, 2000. ''Outsourcing is a valuable option. It allows companies to go about their core businesses leaving the headache of testing to others,'' explains CEO Ratan Chugh. ReadyTestGo offers a suite of services: performance testing, monitoring services, and compatibility testing, and counts Indiatimes.com, Sharekhan, and icicidirect among its clients.

Globally, Mercury is the largest player in the testing market. It, however, insists on customers buying its tools ($100,000 upwards for 200 concurrent users). True to form, Indian testing firms are vendor-neutral, and can work with any tool, hardware, and operating system. This breed-like Chennai-based ThinkSoft and AmitySoft, or the Bangalore-based RelQ-is often restricted to a particular facility and not the entire gamut of tools. Expect these players to begin offering the suite of services, given the huge market for testing within software companies. A typical software firm invests around 5 per cent of its turnover for testing purposes. Guess who's more than eager to check applications for scalability? 

-Nitya Varadarajan

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