Indian Government to Approve Private Int’l Gateways

The government of India has decided to issue approval for setting up the private international Internet gateways by November.

This decision marks the end of monopoly government-owned Videsh Sanchar Nigam Limited (VSNL) in providing gateways.

Dewang Mehta, head of the inter-ministerial security committee for gateways and president of Nasscom, has informed that the government will issue licenses to private ISPs for setting up international gateways subject to security clearance. “The first license for private gateway will be issued by November and the gateways will become operational by March.”

According to sources, eight companies have applied for setting up
international gateways including Satyam Infoway, Mantra Online (British Telecom-Bharti joint venture), Zee Televisions, Jain TV and Maharshi Channel.

According to sources, the government has decided to stay away from fixing
tariffs for these ISPs. “The government has decided to stay away from fixing
prices and will let companies play a dominant role here.” Mehta said.

However, many private ISPs are still awaiting the norms to be clear before
they move to set up gateways. Given the past experience, some of the private
ISPs expressed doubts if the Department of Telecommunications (DoT) had even opened the applications.

N Arjun, chief executive, BhartiBT Internet said: “once they do it, I am
sure, they will have objections and clarifications. That exercise has not
even begun”

Meanwhile, market observers, said the guidelines are ambiguous since
applications for bandwidth have to be routed through the Telecom Regulatory
Authority of India (TRAI). Private ISPs argue that this will render the
liberalisation of the gateway business meaningless since access will have to
be canalised through the government.

ISPs seeking to set up international gateways will have to follow same
guidelines on the use of foreign satellites/cable systems. This segment was
within the jurisdiction of the Department of Space (DoS). The DoT could only refer the applications to the DoS.

Skeptics have reservations though Mehta assures that the private gateways
will become operational by March 2000.

An enthusiastic Mehta said the number of India’s Netizens was likely to go
up to 2 million by August 2002 and 50 million by 2008. At present, there are
about 340,000 Internet subscribers in India.

Mehta also predicted that India will witness a significant jump in
e-commerce transactions, set to touch Rs 100 billion (US$2.3 billion) by fiscal 2001-02, up from Rs 1.31 billion (US$30 million) in 1998-99.

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