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Monday, January 25, 1999

Providing free Internet access may not be a bad idea afterall 

 
In India, VSNL and private companies are just about trying to get their acts together in order to be able to provide reasonably good quality Internet access at a fee which many of us find exorbitant. In the US, however, firms are looking at providing Internet access free to consumers. There are a couple of ISPs in the fray: NetZero and Freewwweb.

Several others are likely to follow even though the free Web access pathway has some carcasses lining it. Among them: @Bigger.net, CyberFreeway, Tritium and j3 Communications.

Access in these cases to the Web was and is really free, as local telephone calls are not charged for in several states in the US. To state but the obvious, they are looking at advertising to generate revenues and keep the operations going.

One estimate is that for a free ISP to make a profit, it will have to sign on 10 lakh subscribers for advertisers to get interested enough to advertise. Then the ISP will have to convince these advertisers to spend Rs 800 on ads targeted at eachsubscriber.

That's advertising billings of Rs 80 crore a month. Others of course believe that even niche free Internet access services serving a small community of 10,000 could be viable, as investments would be lower.

NetZero, based in California, has managed to sign on more than 1 lakh subscribers and is attracting thousand new ones daily. How does it send across its advertising? Via the same traditional banners? No, NetZero sends the ads through consoles or windows. It asks new subscribers to provide information about themselves and their consumption habits.

The ISP then builds on these details by monitoring their online behaviour in terms of interests and spending. It then designs and dispatches specifically targeted advertising to each of the subscribers.

The company has leased 600 Points of Presence (POPs) nationally from network providers and is being funded by a venture capital firm to the tune of Rs 20 crore.

Freewwweb charges its consumers a signup fee of around Rs 5,000 and access is freeafter that. Will such a model of free web access work in India? Unlikely, though MTNL has been threatening to take such a route. It says the telephone charges that a subscriber will incur accessing the net through his telephone network will be enough to cover its Internet operational costs and even make a profit.

That's because it has milked its infrastructure for voice and data traffic over several years - charging what industry professionals believe are exorbitant rates - and covered its costs.

Any revenues that come its way through use of its existing infrastructure will yield high profits. Whether it will finally go ahead with its plan is a moot point, but should somebody take a step of setting up a free WWW access service it will surely help explode not only the Internet market in India but also the sales of computers.The onus is now on some entrepreneur - who is backed by a deep-pocketed venture capitalist - to test the market.Even if free Web access is used as a promotional tool for a period ofsay, three months. But he/she shouldn't expect a stampede from advertisers to get on to his service right away as most Indian marketers are still bashful as far as the Internet goes. Entrepreneurs are you listening?

An eventful February ahead for ISPs

February will have two conferences and exhibitions for those in Internet Service Providing business. One in Canada from February 2-5 called ISPCON Canada '99 and the other in London from February 23-25 labeled ISPCON London '99.

Yes, Mecklermedia, the firm that acquired One Inc, which orgainises the ISPCON trade show in the US, last year, produces both. A swathe of Internet Service Providers is expected to attend both the conferences and exhibitions at both the trade events.

Issues ranging from hardware to ISP marketing to security to value added services to growth to electronic commerce to deregulation to domain name standards to satellite delivery will all be elaborated upon by senior executives from European and US ISPs, hardware and softwarevendors and content providers.

It would make sense if a few of the senior Indian executives from the fledgling ISP business here would make their way and mark the country's presence at the two events.

Not only will their attendance help in broadening their perspective on the ISP business and current and future trends, but will also create awareness amongst vendors and other ISPs and venture capitalists so that they could consider investing in India.

The rush into the ISP business is just about beginning. It could turn into a stampede in future. It is then that the ISPs will feel the pinch.

The business requires deep pockets if it is to be done on a national scale. And it is alliances, which will keep any troubled firm afloat. The two events could go a long way in assisting executives and entrepreneurs to network with individuals who could provide them with the moolah to survive and thrive in what could prove to be a very stormy business.

Power shortage may kill joys of a powerful medium

Thegroup on telecom's (GoT's) thinking is extremely liberal. And if it can translate its views into policy and action, the time is not far when consumers will have several options to make telephone calls, access the net, do video-conferencing, and watch cable TV.

Cable operators will be able to offer telephone services. Telecom service providers will be in a position to offer cable TV. There are likely to be many more firms offering both long-distance and international calls. Ditto with the Internet and other telecom-based services.

This, hopefully, will help prices for these services attain realistic levels. Unless the service providers form cartels and keep prices artificially high.

However, all these efforts will fall short of expectations if the government doesn't act on ensuring better electricity supply, which is woefully in shortage in several metros.Can the government consider setting up a group on electricity with similar minded folks like the GoT?

The writer can be reached atwanvari@giasbm01.vsnl.net.in or television@hotmail.com

Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.


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