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