India Okays AOL’s Domestic Entry

[ASIA] The Indian government has cleared a proposal from America Online Inc (AOL), a division of AOL-Time Warner, to invest $100 million through a newly incorporated Indian subsidiary, Netscape Communications India Pvt Ltd.

India will be the 17th country where America Online is setting up shop. The company has proposed to establish the subsidiary in Bangalore to utilize advanced Internet technologies and a private global network.

The proposed investment of $100 million will be spread over five years. The U.S. software major also plans to pump in additional investments over a period the funds will be used to expand the Indian operations, sources said.

It also plans to apply for ISP license. Though the businesses of the internet-powered media and communication company include interactive services, publishing, music, networks and film entertainment, sources said its Indian subsidiary would be undertaking mainly the software development activities and internet-related services.

“AOL will initially establish a software development center with nearly 150-odd Indian personnel,” says sources related to AOL. It will provide telecommunications and Internet services related to e-mail, Web hosting, Internet fax and telephony and e-commerce services, and to conduct business as an ISP.

The Bangalore center would primarily service the software development needs of the parent’s business, sources said. Later, Netscape India would expand into an e-commerce business.