India's ISP Market
Part 2: Two Incumbents

India's ILEC, VNSL, has tremendous advantages in India's ISP market, but competition has arrived in various forms, including BT's joint venture.

by Puneet Gupta
[November 24, 2000]

We cover two ISPs, the incumbent VSNL (below) and Bharti BT Internet, a joint venture between Bharti (an Indian company) and British Telecom (BT).

VSNL

Background
Videsh Sanchar Nigham Limited (VSNL) is the incumbent phone company. It provides, operates, and maintains international telecom services in India through a network of earth stations, switches, submarine cable systems, and value added service nodes.

Internet nodes are operated by VSNL in Mumbai, New Delhi, Calcutta, Chennai, Bangalore, Pune, Mysore (co-operated by STPI), Dehradun, Trivandrum, Ahemadabad, Jullunder, and Vashi.

Pure Internet bandwidth is around 180 Mbps. This is shared between VSNL and other ISPs. When 336,000 Internet subscribers and 622 leased-lines, VSNL is the dominant player in the Indian market.

Infrastructure and services
VSNL provides internet service called GIAS (Gateway Internet Access Servive). This is available via 20 nodes. There are basically three types of accounts. Student accounts provide text only Internet access. Shell accounts provide standard text-only service based on Lynx. TCP/IP accounts are fully functional Internet accounts.

The company has made a provision of around Rs 1.35 billion (almost US$ 28 million) to establish additional gateways at Kanpur, Bangalore, and Hyderabad. VSNL plans to set up another 9 International Gateways, 20 satellite earth stations, and 5 undersea cables.

VSNL is also significantly increasing its optical fiber capacity. Another 155 Mbps (STM-1) link between Mumbai and the USA should be completed soon.

Plans and projections
With a planned expenditure of over Rs. 7 Billion (revised)—over US$ 150 million—over a five year period, VSNL is planning to diversify into other areas including Satellite Mobile Services, Internet and Value Added Services, Direct to Home Satellite Platforms, Video Unlinking Facilities, DTH Satellite Systems, and ATM Transmission services.

VSNL also hopes to become a global and regional player through the creation of a regional hub in India.

VSNL's Internet services feature multi-lingual services, Internet to paging (through an agreement with "Easy Call"), and a WAP gateway in-progress.

VSNL slashed international private leased-lines charges by 50 percent to all ISPs. It also reduced charges on new TCP/IP connections.

This should enable India to improve its infrastructure as the Internet boom continues.

Summary
Strengths

• Large Subscriber base
• Strong infrastructure
• First ISP in Indian market
• Enjoys good government support

Weaknesses

• Not exposed to competition
• Poor consumer reputation
• Comparatively poor service and support to endusers

Opportunities

• Opening up of domestic long distance
• DTH satellite market

Threats

• Impending deregulation
• End of monoply advantage
• New competetition

Bharti BT Internet

Background
Bharti BT Internet is a strategic alliance between Bharti enterprises and British Telecom (BT). Bharti BT offers Internet service under the name mantra online internet services. The service opened in March 1999.

Infrastructure and services
Mantra online has PoPs in Bangalore, Delhi, and Mumbai with total capcity of around 25 Mbps. It provides dialup Internet service using analog telephone lines (PSTN), and digital connectivity via ISDN.

Mantra provides a variety of packages which include flat fees and flexi tariffs. A surf at night package allows user to surf the Internet at night at a special economy price. Mantra also provides Mantra global service, allowing subscribers to access the Internet anywhere in the world using the same login and password.

Mantra's ISDN service allows dedicated access to the Internet at 64Kbps. Mantra online provides a static IP address ISDN customers, enabling the creation of ISDN-based LANs.

Mantra online also provides a leased line facility with a fallback ISDN option for mission critical services.

Plans and projections
Mantra online plans to have PoPs in around 31 cities in the very near future.

The company plans to diversify by creating a WAN consultancy and rolloing out ISP gateway solutions for third-tier ISPs.

Summary
Strengths

• Good customer service
• Good customer base

Weaknesses

• Growth is slowing

Opportunities

• Gateway
• Business services
• WAN consultancy

Threats

• VSAT service providers
• System integrators

[back to VSNL]

—End