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Videocon To Roll Out Set-Top Boxes, Enlist As An ISP

Videocon International, one of India's largest consumer electronics and home appliances companies, is all set to start manufacturing set-top boxes (STB) in the country in addition to its plans to become a national (A-grade) ISP.

A combination of STB manufacturer and ISP would put Videocon in a unique position -- the first Indian company to combine consumer electronics, information technology and communications.

Its competitor, electronic giant BPL, holds an ISP license and is planning to become a major player in the convergence sector, but it has not yet revealed its complete plans to the public.

According to Naveen Mandhana, CEO of Videocon's India OA Systems (previously Videocon Infochannel), the company plans to manufacture about 25,000 STBs per year initially and increase the output once the market expands.

"Currently nobody manufactures set-top boxes in India. And for us it will be a good synergy with our existing range of televisions," he said.

Videocon plans to launch its set-top boxes, priced at US$375 each, sometime next month, according to sources. However, the company was not willing to divulge the name of the technology provider. Apparently, the technology for Videocon's Net TV offering was acquired from a U.S.-based laboratory. Unconfirmed reports say that Sony of Japan is the only other company to have acquired this technology from the same lab.

Though a decision to apply for ISP license has not finalized yet, the company is actively preparing for the foray to Internet market, said Videocon International president Pradeep Kumar Dhoot. He says the STB will come equipped with a wireless keyboard and 8 MB memory that will allow users to download small amounts of data.

The company will use its existing television distribution channel to market its STBs. It also plans to enter into an OEM agreement with large cable companies which start offering Internet services.

According to analysts, the market for STBs in India will grow exponentially when Internet access becomes easier in the secondary level cities, which will mainly be targeted by the cable TV operators.

Apart from STBs, Videocon is planning to launch tv.comp -- a combination of television and a computer with multimedia facility -- with 21 inch television. The earlier versions of tv.comp launched earlier this year came with 25 inch TV and a price tag of around US$950. According to Dhoot, the tv.comp would co-exist with STBs, where tv.comp would target consumers seeking higher configurations.

However, experts point out that the surfing experience on a television will not be that satisfying because of the poor resolution of a television as compared to a monitor.

Videocon has embarked on a massive globalization program, with the objective of building a US$500 million company by the year 2007. The STB project forms part of the plan, says Dhoot.



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