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'We intend to be a broad-based, full-function Internet service provider. We are looking at all the three spaces–consumer, corporate and portal.'

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VoicenData Bureau
New Update

What was the need for Tata to enter into Internet services?

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At the Tata Group, we have certain strengths. First, we have

substantial interest in telecom. World over we are seeing the data market

catching up and overtake the voice market in terms of traffic. So very clearly,

we feel there is a growth opportunity for us in the telecom business.

Second, from the point of view of what we can do for the

corporates and consumers, internet services can open up new channels of

business. They can open up new avenues to reach customers by providing direct

new points of contact with the customers.

We have interest in the traditional or old industries, in

practically every major sector. There is a clear interest in those companies to

web-enable their operation and deal with their customers. We have substantial

strengths and interests in software services, application services, project

management, and they are important elements required to succeed. That is why we

aim to infuse Rs 500 crore in two-three years and be present in thirty cities.

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Is this to advance Tata’s interest in the new economy

business or to build an Internet enabler for the Tata Group of companies ?

The Internet business does open up opportunities in

the new economy. We also have large captive customers and there is an

opportunity within the group itself which we cannot ignore. We have not built it

with the prime intention of being an internal service provider and the intent is

to go out to the market but the fact is that we do have a large customer base

internally.

It will be possible for us to do web-enablement of the

existing companies, build their web sites, host sites for them, provide them VPN

and data center services. By virtue of being a large group, we have a fairly

wide set of interests in different segments of the consumer industry.

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How will your group companies be of help to you to in your

strategy of winning external customers?

We have substantial interest in telecom services.

We have fiber underground and have several customers who have access to Tata

Teleservices. I cannot afford, with the pricing in the existing market today, to

put in place a credit verification, billing and collection mechanism, etc.

Post-paid model is something which I cannot look at, today. But Tata

Teleservices has an existing mechanism by which they can provide billing

services to their customers. I can provide the same to my customers in

conjunction with them. These options do exist.

On the software side, TCS is doing a lot of application

development work for us. They have done application development for our portal.

We are working with TCS and Tata Infotech on several corporate and non-corporate

opportunities.

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What kind of an ISP do you want to be?

We intend to be a broad-based, full-function

Internet service provider. We are looking at all the three spaces–consumer,

corporate and portal.

But, companies today look like carbon copies of each

other. Will you be any different?

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There are just one and a half million Internet

subscribers in the country today, which is very low. Most of them are providing

dial-up services, because there is no infrastructure for providing other

value-added services. We have not been able to skim the surface as far as

broadband services are concerned. We have quite a bit of distance to go in terms

of the kind of Internet services that we can provide to the consumers, and not

the corporates. For the latter, the world is even bigger.

From our standpoint, we think that the market is in its very

early days. There have been issues in terms of business models. We have cases of

people offering free services. I am not sure, how they will survive, but they

are not the models we want to follow. We believe there are market opportunities

for us and we want to provide decent service and stay in the marketplace.

Are you not trying your hand at too many things?

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We do not need to be different to provide good

service. We have to do things well. The main differentiator lies in the strategy

involved in executing it.

Are you also going to lay infrastructure?

We are a value-added service provider and not an

infrastructure company. We will ride on each other’s network to provide better

services. The quality of infrastructure is going to improve in a year. We are

not going to lay any fiber.

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What has been the response from the corporates so far?

So far so good. Where we are facing a bit of

problem is in the number of a locations that we are in. We are in five locations

today. We will be in thirty locations by September 2001.

Do you also have to target the consumer business?

In the long run, the key issue in telecom is going

to be, who controls the consumers. There are multiple avenues for the consumers

today. This is through the existing phone services, both basic and cellular and

through cable services in various forms. Those who will be able to control the

consumer will be in a position to get a long term gain.

Very clearly, we also want to be in that space where we have

access to the consumers. This is going to be beneficial in the long run.

You have sunk in considerable investments, where will the

revenue come from to sustain your business?

We are not going to make any money in access or

portal in the short term. We have the financial strengths to sustain for three

to four years. We will be spending Rs 500 crore over that time period.

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