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Amitabh Kumar defends VSNL's position

Amitabh Kumar, Videsh Sanchar Nigam Limited's acting chairman and managing director, delivered the lecture on 'ISP network and services: The Indian challenge'.

Actually, he used the opportunity to convert the subject into a corporate presentation for VSNL. But then, the audience was not exactly complaining. After all, VSNL is the only ISP in the country today.

In a presentation lasting over 45 minutes, he explained all that you ever knew about VSNL and nothing about what you wanted to know.

Kumar explained that the demand for Internet access has shifted to smaller cities from the larger metropolises. He elaborated on the current Indian Internet scene.

There is not much to explain here. VSNL and DoT are the only Internet service providers today. VSNL has 40 points of presence and nearly 150, 000 Internet accounts.

Kumar admits that the figures are not very happy right now. "These are small numbers but we estimate that there are half a million users in the country with three to four users on every account," he said.

As per the current mandate, VSNL operates in six cities including Bombay, Pune, New Delhi and Calcutta. The DoT has its own network in all other parts of the country.

Kumar hoped that this would change with the introduction of the new ISP policy. He revealed that VSNL had applied for the license for ISPs in order to increase their presence throughout the country.

To the eager audience that was waiting for any comment on why the new ISP policy was being delayed, Kumar did not reveal much.

"Earlier, DoT came out with a policy which I feel was very good. It was to have no license fees for ISPs. It also carved the country into different areas. ISPs were then to apply for those sectors in which they were interested. But then the IT Taskforce had different ideas. It wanted the policy to be more liberal. Now we are trying to bridge the gap between the two and bring out the fresh policy soon," he explained.

Kumar claimed that there is a robust backbone in the country provided by VSNL. "There is 70 MB available for international connectivity and 2 to 4 MB that sometimes goes up to 8 MB available for domestic connectivity," he said.

VSNL has optical fibre and satellite connectivity to connect different points in the country to various countries. A bandwidth of little over 40 per cent is available today for international connectivity.

"The connectivity is mainly to the US where the maximum traffic originates from," he said. Kumar asserted that "VSNL is extremely excited about the ISP sector opening up."

The essential issues for private ISPs would be to get connected to a backbone in India, getting the access line to the ISPs, the cost and auxiliary services like domain names and IP addresses. These ideas would be critical to the growth of ISPs.

Kumar reiterated that the backbone provided by VSNL would be available to ISPs for connection while the backbone planned by DoT would be up soon.

"DoT has a fibre network connection throughout the country so it is not difficult for them to build a backbone. I believe that the private ISPs would like to get into building backbone. Yes some of them will venture into this," he said.

Backbone users pay part changes only for connecting and the costs are fixed. But they have limited control over the network and the delays.

Backbone providers, in turn, need to buy lease lines to other cities and countries.

The primary problem faced in providing Net access in India is that of giving access lines. "It is not that telephone lines cannot be provided but the fact that they are geared to meet Internet traffic. The lines can handle telephone calls lasting for five to ten minutes at the most but the Internet traffic lasts for close to an hour," he elaborated.

There are 30 to 40 telephone exchanges in each city and 10,000 lines for 100,000 users. Most of us with a dial-up line have had the problem of being rudely disconnected in the midst of important downloads or worse, within minutes of logging in.

Kumar revealed the reason for this problem. "There has to be proper synchronisation between different exchanges. If there is a small slip during the transfer of data between different exchanges then the user is disconnected," he said.

The important issues to be considered is reduced rate of dialling and reverse charge dialling so as to give users greater flexibility and a sort of a roaming facility.

Kumar stressed that segregation of Net and telephony traffic should be done and a national level Internet exchange would have to be set up.

The key areas for the improvement of Net services would be in terms of line quality, inter-exchange synchronisation, data quality and technological skill upgradation.

Kumar explained that high usage costs were because 80 per cent of usage of a line is for international connectivity. Today a lease line cost Rs 75,000 a month because most of the cost is dedicated towards international connectivity charges.

A 2 MB port in the US costs $3,000 per year and to be included are additional cost of access lines which would make a total of $6,000 a year.

For a connection the cost of international connectivity is $18,000 per month, both by satellite and fibre optic cables. Since most of the databases and content accessed is overseas, this naturally pushes up access cost in the country.

There were a lot of questions from the audience about the traffic rates of VSNL. Kumar brushed these questions aside, stating that only the TRAI had the power to fix tariffs and VSNL was not involved in the process.

The tariff for TCP/IP has been steadily dropping from Rs 100 per hour in 1995 to Rs 20 per hour in 1998. "This is a very reasonable rate in the current situation," he commented.

Summarising, Kumar said that ISPs need to plan long-term strategies and focus on niche areas like corporations and the rural market where penetration is low. Niche applications like e-commerce also need to be developed. Internet telephony, Web commerce and real time video and audio applications would be the new directions that the Internet would be taking, he felt.

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