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Priya Ganapati

Zee Television Limited is all set to launch its Internet services over its cable network, Siticable, in Bangalore, Delhi and, later, in Hyderabad and Bombay. The company plans to launch the service within a month in Bangalore.

C S Arora, general manager, technical, told Rediff On The NeT, "Bangalore has a high PC penetration and a strong Zee cable network. So we plan to start our services there first." Zee plans to invest over Rs 4 billion in its Internet project over the next five years.

"This is a new field. So, we want to educate ourselves first and get familiar with problems that may arise in the initial stages. Once that is clear we can easily duplicate our success in as many cities as we want," says Arora.

The project's unique selling proposition is that it will depend on cable modems, which transfer data at 38 Mbps. A normal telephone modem, by comparison, chugs along at a sedate 36 Kbps.

The tariff has been fixed at Rs 1,000 per subscriber per month plus a separate fee for material actually accessed off the Net.

"We will put meters on subscribers to keep a log of this. We will provide some sort of concessions in the tariff for different things like usage on holidays and amount of data downloaded," he said. By comparison, regular dial-up services charge a flat access charge.

The biggest hurdle, however, is the cost of cable modems, which come at about Rs 15,000.

Zee aims to avoid this phase by providing cable modems at Rs 500 per month in the initial phase on a lease rental basis. It later hopes to explore the possibility of a tie-up with a finance company.

"Today cable modems are available at a fancy price. So, we are looking at the renting and leasing option. But ultimately we don't want to get into the hardware business. We foresee a scenario where cable modems will be sold directly, like dial-up modems today," Arora said.

"Six months ago cable modems used to cost nearly $ 400 but now they are available for less than $ 250. Similarly dial-up modems used to cost something like Rs 18,000 three years ago but today you can get one for around Rs 2,500. The prices of cable modems will similarly fall over the next few years," he said, adding that the prices had also remained high because standards for cable modems have been proprietary.

"But now the cable modem market is moving towards to a more open standard and we will also follow this trend," Arora said.

Zee aims to garner 30,000 subscribers in the first year from the four cities where its services will be operational. Arora is quick to justify these low figures. "Over a period of five years we are expecting a subscriber base of five million. This is because cable modems are a new thing. Once the initial subscriber base is set up then it won't take long for the service to pick up," he said.

Zee is hoping that quick downloads and its value-added services will prove a big draw.

"Initially we plan to offer only browsing and email facilities. But over time we will offer e-commerce and web hosting too. The high bandwidth available will also help us offer services like video on demand and games," Arora said.

He revealed that Zee network's other services like Zee TV and Zee News would also be made available exclusively to its subscribers over the Internet.

"These things will take some time but the high bandwidth available to our subscribers will make it possible for us to introduce these services," says a confident Arora.

Though the investment required to provide Internet over cable television is more compared to what a regular ISP offering dial-up access to its subscribers will incur Zee hopes to break even in about three years.

"In terms of infrastructure, we have to add just one more unit, called a Cable Modem Termination System. This is very similar to RAS used regular ISPs [Internet Service Providers]... Otherwise the investment in infrastructure is not very different from those of other ISPs," Arora said.

Zee will launch its services next in Delhi in about two months. In the initial phase, it will provide Internet access on its cable network in Bangalore, Delhi, Hyderabad and then Bombay.

Zee's closest rival in the cable network business is the IN network owned by the Hindujas, who also plan to provide Internet access over cable television.

Arora said competition did not worry him.

"We have a presence in 40 cities while they are there is seven cities. We have a subscriber base of 4.5 million for our cable network. We needn't worry about them," he said.

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