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T ata-owned Videsh Sanchar Nigam Limited (VSNL) is planning to consolidate
its position in the broadband market. Earlier this year, the company had made
its intentions clear when it acquired Dishnet DSL, and in July, they launched
their pre-paid broadband plans under their Tata Indicom brand. This scheme was
launched in Mumbai and will soon be taken to the other three metros and eight
sub-metro towns. The company already had a head start with Dishnet's 40
cities, including Mumbai, where it was offering DSL services though mainly to
the corporate clients.
The new offerings also mark completion of the integration of Dishnet's
services, and VSNL will market all its Internet services under one brand, Tata
Indicom.
After the initial dial-up blitz, VSNL has been going slow and low key with
regards to its Internet offerings. The company (Tatas) has been testing and
trying all the options available to make its offering commercially viable. Tatas
have been focusing on mobile market from the CDMA side and positioning VSNL as a
complete Internet services company, apart from the long distance business where
it is still the leader. The company has been strengthening its backend
infrastructure by laying down fiber and also sharing the 23,000 Rkm optic fiber
infrastructure of Bharti, part of which will be used for the new offerings.
Dial-up and Broadband Services
Internet service providers moving to broadband services is not a new
phenomenon especially when the dial-up business is becoming unviable for most of
them. Unlike others, for VSNL the broadband move does not mean a shift in the
strategy. In the next couple of years, it will not be a surprise if BSNL-MTNL,
VSNL, and Sify are the only players offering both dial-up and, some kind of,
broadband services. In fact, the broadband plans for BSNL-MTNL have failed to
take off and they are in the process of recasting their strategy. Companies like
Net4India, Mantra (Bharti), and Now (Data Access) have stopped giving new
dial-up connections and are limiting themselves to broadband services. Players
like Data Infosys are limited to a particular regions. This leaves just Sify,
apart from VSNL, as the only private player offering both the services across
India.
Debit Card for VSNL Services
For VSNL it makes sense to have both the services running simultaneously.
The company does not have a visible presence in the cyber café market like Sify,
but is strong in the home user and SME segment. Its prepaid offering appeals the
users as they can access any service provided by VSNL through their accounts.
For example, if a Mumbai businessman having a broadband account travels to the
Northeast, where there's no broadband, he can still use VSNL's dial-up or
Internet telephony, through the same account. At present, the company offers
four Internet services, but the number could go up to 25 in the coming days.
This strategy will save consumers time as well as the hassle of looking for ways
to use and pay for these services. The billing will depend either on the time
spent or volume used by the consumer.
The prepaid concept is not new. Sify, Net4India offer such plans for users to
access the services from anywhere. The VSNL advantage is the number of services
from one account.
Cable, DSL, and Wireless
Almost all the ISPs have adopted a technology-neutral last-mile access and
the back end primarily on fiber optics. VSNL also has a similar strategy and
will be adopting a mix of franchise as well as direct selling model to approach
the customers. For the home segment, VSNL has tied up with cable operators. The
company will leverage on the copper network of Dishnet and Tata Teleservices for
DSL, and elsewhere it is going for a cable, Ethernet connections.
VSNL is also banking on TRAI's recommendation to unbundle BSNL's copper
for DSL. But with Dishnet customers already in its kitty, there is no hurry.
VSNL might even wait till market conditions ease. Surprisingly, VSNL does not
have any plans on wireless. Regulatory roadblocks are the primary reason for not
starting Wi-Fi or wireless access services. However, Tata Teleservices has been
offering 'high speed' Internet over its fixed wireless terminals. So, a
clash of business interests also comes in. But, surely the doors are not closed
and as the wireless access market grows and becomes viable, VSNL will offer
Wi-Fi or WiMax (wireless) services.
TRAI classifies access speeds over 256 kbps as broadband. Tata Indicom
promises speeds over 512 kbps, which is good given that we are still stuck at 32
and 64 kbps speeds. But, the typical problem of 'more users, less speed'
will still continue. However, VSNL assures that at no point would the speeds go
below 256 kbps. But the real speed test will come after more customers start
using the broadband service.