Having created a large base in CDMA only recently by using a deferred payment scheme, Reliance has the advantage of distributing handsets that are ready for the internet, unlike the older, GSM telephony providers, whose users have to upgrade to costlier handsets to access the internet.
In terms of access cost, Reliances internet service could work out to be costlier for heavy users, but it has a big advantage the service is available across all 17 circles. GSM service providers are yet to finalise a nationwide inter-operatibility pact. Reliance reckons that, if it gets just 14 per cent of its five million customers to buy the internet package, it will have the numbers to reach for the number one slot in the ISP business.
Reliance operates wireless CDMA services under the brand Reliance IndiaMobile, and the fixed wireless phone service under the Reliance IndiaPhone brand.
Reliance is offering the users of these services its own internet access, R-Connect, for an extra monthly charge.
Subscriber numbers are not a problem with GSM service providers, who offer GPRS or general packet radio service also for an extra monthly charge.
For example, Bhartis Airtel has nearly 36,000 GPRS subscribers in a total GSM base of 5.4 million. Hutch has around 3.6 million subscribers, but declined to give the number of these who use GPRS.
A Reliance spokesman said: We already have 1,50,000 R-connect subscribers whereas the market leader in the dial-up ISP services is around 700,000.
To be number one ISP in India, what we need is a 14 per cent penetration of the existing five million customers.
For GSM users, GPRS enabled handsets are already in the market at low prices of Rs 7000-plus, and prices are expected to go down further.
But a Reliance customer can start up with just Rs 501 for the handset, and Rs 500 for the R-Connect service.
Reliance, as well as its GSM rivals AirTel and Hutch, are already pushing their internet services.
Reliance is offering the R-connect facility in all 17 circles, at three plans standard, silver and gold, with monthly fee of Rs 200, Rs 500 and Rs 1,000 respectively and a onetime payment for the browser software.
In the standard plan, customers have to pay an airtime of 40 paise per minute with no limit on data usage. The silver and gold plans do not have airtime charge, but the company offers only 100mb of data transfer for silver and 250mb for gold, with a charge of Rs 10 per mb over these limits.
Hutch and Airtel levy a flat rate of Rs 499 a month for unlimited access to the internet.