To start with, the company is launching a pilot optical fibre-cable projectin Delhi soon which will be followed up by projects in southern and westernIndia over the next few months, sources close to the company said. L&TCommunications chief executive Naveen Sood confirmed that the company is ingiving final touches to the technical and business models of the Internetinfrastructure project. It plans to build an across-the-country broadbandnetwork services for Net and convergent communications.

L&T announced its plan to become a major Internet services provider (ISP)and network services provider (NSP) on January 14. To achieve this thecompany has set up L&T Netcom -- the ISP arm -- and L&T Communications forthe NSP business.

L&T expects a Rs 2,000-crore turnover from its IT-related business by 2006.The company plans to invest Rs 450 crore in these businesses in phasesdepending on market and business needs. However, according to industrysources, the IP backbone project will call for huge investments which thecompany may raise through collaborations.

At present, state-run MTNL and DoT are the only players in the Internetinfrastructure businesses while Indian Railways, Powergrid Corporation andGas Authority of India have been laying communications pipelines for theirin-house use. The new L&T venture will not eat into DoT and MTNL revenues as"the cake is too large and can be shared by new players," said industryanalysts. Moreover, MTNL and DoT are into voice networks primarily fortelephony while L&T Communications' network will primarily be for datamovement. In India, the UN-backed WorldTel, run by Sam Pitroda, was thefirst off the block into Internet infrastructure.

WorldTel has tied up with seven state governments to set up an IP backboneacross the country as part of its plan to provide Internet infrastructure inthe Third World and emerging markets. Reliance Industries has tied up withWorldTel for the IP backbone in Tamil Nadu. The petrochem major is sewing upsimilar deals in some of the other states as well where WorldTel intends tobuild up the communication network.

L&T's foray into this area is, however, on a larger scale, sources said. Theengineering giant is also gearing up to cover the application part of itthrough the ISP arm -- L&T Netcom. This will be necessary for verticalintegration.

"Both WorldTel-RIL combine and L&T can share the business here as worldwidewe see more than one player dominating the Internet infrastructure businessin a country. For instance, in the US, MCI Worldcom and AT&T are the twomain players in this business," an industry analyst said. Silicon Valleycompany Sycamore competes with Lucent and Nortel Networks in providingsolutions in Internet infrastructure.

L&T CEO AM Naik had ealier said that considering the large scope for growthin the infotech and communications business, the company plans to give anadditional thrust to this area. The company's board approved its plans forIT services in the second week of January. "We may invest more in thetelecom sector as and when opportunities arise.

We have made only a start with the ISP and NSP forays," Naik had pointedout. The company has a wholly-owned information technology subsidiary calledLTITL which has identified five thrust areas to compete in the globalmarket.