According to Amitabh Kumar, director, operations of India's largest ISP VSNL (Videsh Sanchar Nigam Ltd), opportunities for dotcoms will be very limited in the Indian market for some time. "The market had been static for the last four months, with around 700,000 users in the country," he said.

VSNL has a subscriber base of 400,000. Even taking into account users of other ISPs, the total, according to Kumar, cannot be more than 800,000. This figure is lower than the 1.2 million mark recent reports have suggested.

Kumar said that while ISPs were slashing Internet access rates, the cost of access to the consumer had not significantly decreased, the inhibiting factors being high computer costs and telephone charges.

Unless the user base rose quickly to touch the 2-3 million figure, not only the B2C dotcoms, but also many ISPs themselves would not be able to survive, said Kumar.

Ajit Balakrishnan, chief executive officer of the Nasdaq-listed Rediff.com thinks that the transition from advertising to e-commerce driven business models on the Internet is yet to happen. "Just 30 per cent of Yahoo! revenues come from e-commerce even today," he pointed out.

Expanding on the industry projections for online advertising, which constitutes Rediff's core revenue stream, Balakrishnan said that typically about 6 percent of advertising moves online five or six years after online advertising establishes itself. E-commerce currently accounts for only about 5 per cent of Rediff's revenues.

"The cost factor and infrastructure are not keeping pace, and the customer is confused," said Mohana Pillai, chief executive officer of ISP Pacific Internet. Unreliable ISP services and poor telephone lines only add to people's suspicion, he added.

Stressing that liberalization of issues pertaining to the Internet would instantly generate more users, Pillai said, "China is a good example, it has four million to six million users of the Net, while we, a nation so much more familiar with English, the most common language of the Net, has not even touched the one million mark."

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