YOU TOO WANT TO BE AN ISP IN INDIA?

1. opening up long-distance and international data communications to the private sector and other government bodies such as the railways,

2. made available a slice of wireless bandwidth for public networking,

3. allowed cable TV operators to offer Internet connectivity.

In addition, there were a whole range of positive changes introduced, which are described at the url cited above. These recommendations have been published in the Gazette of India, and so form part of the law of the land. The demand for Internet connections is so large that VSNL, the monopoly ISP, cannot cope. This does look like a good time to be entering the ISP business in India.

Problems for prospective ISPs

Private ISPs will face several challenges. These include:

• The government monopoly may be shaken, but it is still formidable. VSNL has a couple of years experience in offering Internet services in India, and has a large installed base of customers. It won't be easy to lure them away, unless you charge substantially less, and that will be hard as well. VSNL buys international connectivity in bulk, mostly for voice traffic, where it has a monopoly till 2004. ISPs that buy far less bandwidth from international carriers will surely end up paying a higher rate.

• VSNL is working with the DOT and MTNL (the local provider in Mumbai and Delhi) to route Internet traffic right from the local exchange into a network separate from the voice traffic. If your customers have to rely on the voice network, their lines will disconnect more frequently, since they will be routed to you via several telephone exchanges, plus they may not get as much bandwidth.

• VSNL makes huge profits in carrying voice, which it can use to cross-subsidize Internet services.

• It is expected that at least 300, and maybe as many as 3000 companies will apply for an Indian ISP licence. The US has orders of magnitude more users, and only 2-3 times as many ISPs.

So, how does one compete?

Exploring New Options

Whoever you talk to among the prospective private ISPs, they seem to have more or less the same strategy, which involves use of POTs lines, or at best ISDN, for the last mile connectivity, and concentrating on the big cities. In this segment of the market, there will be far too much competition. However, other opportunities exist:

First, look for possibilities to permanently connect customers to the Net. These will be particularly attractive to business customers, who can access their computers from a remote location, maybe host their own web content, and use Internet telephony as conveniently as they do the conventional kind (whereas people who use dial-up must find a way to coordinate their log-ons with the people they wish to talk to). Ways in which this can be done include:

1. Cable can offer much higher bandwidth at comparable rates to dial-up. Not all cable TV operators are affiliated with the big guys such as Siti, and they all will be interested in getting into the ISP business sooner or later.
2. Wireless modems in the frequency band 2.4 - 2.483 GHz can also be used for last-mile connectivity. Currently, these modems are very expensive. In the US far cheaper devices are in use in the 900 MHz band. These should be adapted for the higher frequency, so that they can be used in India.

Second, over the next couple of years, a host of new ways of delivering bandwidth to customers will become available. A variety of companies will offer satellite-based connectivity, others such as Sky Station International plan to use balloons to offer cheap, high-bandwidth connectivity. Possibilities such as these need to be aggressively pursued.

Third, look beyond the 1% of Indians who are fluent in English and can afford an expensive computer. Voice applications such as Internet telephony and radio make the Net accessible to the poor and illiterate, because the client "terminal" need be no more complicated or expensive than a public phone. True, VSNL claims that under the THE INDIAN TELEGRAPH ACT, 1885 it has the right to ban Internet telephony, but that is a questionable claim, and the government can surely be made to see reason in this matter. Go to the smaller towns, as well as to townships run by companies (e.g. near their factories at remote locations) -- these are places where people have far less opportunity for entertainment than people living in big cities. Encourage local-language content -- start by ensuring that mail can be sent and received in the local script.

Fourth, when issues are to be sorted out with government, don't go it alone. Join and strengthen organisations such as the E-mail and Internet Service Providers Association of India (EISPAI).

Fifth, be willing to hold your customers' hand a lot, particularly during the initial period. There can be many reasons why an Internet connection doesn't work -- a hardware problem in the customers' computer, improperly installed software, sub-optimal modem settings, problems with the phone line, problems at the telephone exchange, problems with your modems not talking too well with the one the customer has, problems at your server, the DNS, and other problems somewhere in the vast Internet. These are enough to even stump people with decades of computer experience, such as yours truly. This is where VSNL fails miserably, and in all likelihood, will continue to do so.They simply shrug and say, the servers are working fine, you have to prove to them that there is something that they can do about it, before they move. You must sympathize with the "newbie" who has just swallowed a lot of hype, and bought a cheap gray-market computer to get onto the Internet. All the experienced techies already have Internet connections, so you have to be willing to take the trouble to help such people get on board, because if you do, word will spread, and there will be almost an unlimited supply of such customers in the country. But you don't have to do this alone, which brings me to the next point.

Sixth, set up and nurture user groups -- all it requires is a room with a couple of computers once a week, lots of beverages and snacks, and a sympathetic technical support person in attendance. You will hear lots of complaints there, which is why people like VSNL are afraid of such groups. But you should listen, and do something about their complaints -- you'll win loyal customers that way. You'll find that these very same customers will take the load off you, by helping each other. People often come to the Internet not for information, but for community. Help them find that, and they will stay with you, and bring their friends.

Seventh, allow people, no, help them, set up web pages, chat rooms, mailing lists,... on your server. This is again an area where VSNL won't listen. This can actually help cut down your costs -- if people from overseas want to access content on your server, your international bandwidth costs will go down in the long run.

Lastly, with a situation that changes so rapidly, and the host of technical and political issues involved, seek upto date and quality information. One source of such information is a free of cost Internet discussion group I moderate, see india_gii's home page and its archives at FindMail eGroups.com. Or mail me at amehta@cerfnet.com
http://www.cerfnet.com/~amehta/