The Essel Group which has a strong presence in media through Zee TV and in the cable industry through Siticable, is set to become a dominant player in the convergence industry by venturing into Internet-on-the-cable and its satellite telephony project, Agrani.

What is now being drawn out is a marketing plan which would enable the distribution of all these services through one-stop communications shops. The Group may not set up the communications shops on its own and may instead franchise them. ``For all you know a grocer may be selling you a satellite phone service. Distribution is going to be the key and the Essel group companies would synergise their marketing efforts to create communication shops selling an entirerange of convergence products,'' said Agrani Satellite Communications group president and CEO Jai P Singh.

The idea behind the move is clear. Distribution channels for telecom products are still being created. In the cellular areas (which is not expected to be more than 30 per cent of India's total surface area, by 2005), these channels are being created by the cellular service providers through galleries, and franchisee and company-owned outlets, etc. While one option is to piggyback on this channel, the Essel Group sees itself as being a complete convergence player, and would therefore strive to provide the entire range of products under one roof.

The more critical role for the communications shops would be in areas outside cellular reach, where an entire new distribution channel would have to be created. Considering that the success of a satphone and other communication products would hinge on lower costs translating into lower prices, the group is clear that the distribution channel would have to besuch that it does not call for heavy investments.

This is where the synergies of the group come into play. For example, the cable business of the group is expanding across the country, even as other group companies--which are into packaging etc--have their own distribution channels as well. Now, the Group feels these distribution channels could come together for integrated convergence sales--and that communication products should be picked up off-the-shelf.

``Once the cable operations spread across the country and along with them spreads Internet-through-cable, we would be able to sell the satphone services along with them, through one-stop shops. The cable operator for example, could become the sole distribution channel for the cable TV, Internet, satphone and any other product that convergence would throw up. The strategy would vary from town to town,'' said Singh.

The emerging scenario? In Mumbai, the Agrani satphone could be sold through a BPL Mobile Gallery--but the same satphone would be soldthrough a leading cable operator in a town in Gujarat. In a smaller town in another state, where the group companies do not have a distribution channel at all, a grocer could even be roped in to be the one-stop retailer for the Essel Group's convergence product-range.

Agrani is positioning itself as a satellite phone service provider which would cater to the `economy class' of subscribers, unlike the other such global providers whose tariffs are extremely high. ``Our charges of both the handset and the airtime would be extremely affordable and that is our USP. We would be tapping the vast population residing in non-cellular reach areas and the distribution of our product would be in a manner which is best suited to get to this client base of ours,'' said Singh.

Agrani is expected to commence services by 2001. The satellite development work is expected to commence later this year. The handsets are being developed by Lockheed Martin, but the company would be forging tie-ups with other manufacturers as well.