Indian ISPs Form Alliances To Tackle Market Growth Challenges

Indian ISPs in the recently liberalized Internet access market are forming alliances to tackle domestic growth obstacles and regulatory hurdles.

Over 20 ISPs have teamed up to form the Internet Service Providers
Association of India (ISPAI). India’s Department of Telecommunications has
awarded 75 ISP licenses to Indian organizations.

R. Ramaraj, ISPAI president and managing director of Satyam Infoway–India’s first national-level private ISP–said ISPAI has applied for
government clearance to set up an international gateway to the Internet.

This link can be shared among members of the “bandwidth club” of ISPs,
since such a gateway can cost as much as $20 million, according to Ramaraj.

“Small ISPs can also work with larger ones to save costs in areas like
billing and customer care,” Ramaraj said. Some ISPAI members are in
discussions with ISP associations in the U.S. for setting up cooperative

Partnerships for service alignments and content aggregation were also
discussed at the National Seminar on Effective Usage of ISPs, sponsored by
the Manufacturers’ Association for Information Technology, IT training company NIIT, and Compaq.

India’s National Planning Commission has predicted that the country would
have two million users by year 2000.

“We need more ISPs to boost growth beyond these numbers,” said Ramaraj.
Satyam Infoway has commenced operations in 12 cities; 8 more state capitals
will be targeted by April.

“We are also working along with automotive associations in India to extend
our EDI and Web-EDI pilots to the auto sector,” said Ramaraj.

Satyam Infoway has already been offering EDI services to consumer goods
companies like Whirlpool and Dupont. It has e-commerce tie-ups with Open
Market and Sterling Commerce.

Another area for ISPs and Web solutions companies to work together is in
integrated Web hosting centers, said Ramaraj.

“International alliances can formed in areas like renting applications,
value-added services, and global roaming facilities,” said Anand Talwai,
chief executive of communication services at Wipro Infotech, which plans to
launch its ISP offerings in the next two months.

Wipro Infotech currently offers intranet and extranet services to over 20
Indian corporates, and has 20,000 subscribers to its e-mail facility.

Some global roaming consortia (such as iPass and GRIC) have already struck
alliances with Indian ISPs like Satyam Infoway.

Other Internet initiatives are being launched jointly by industry and
government agencies.

Sanjay Das Gupta, IT Secretary for Karnataka, said the state would set up a
school for Internet studies as well as a school for IT entrepreneurship
later this year, in conjunction with IT giants like IBM.

The schools will help “anticipate manpower and human resource requirements”
for the state.

In addition to the challenges in ensuring a level playing field between
private ISPs and government telecom agencies, Indian ISPs and other
Internet professionals need to collectively address cyberlaw issues, said
M.S. Rangaraj, chief technology officer at IT-services firm Microland.

“For e-commerce to take off, the Internet industry and government
policymakers must work together to update laws like the Indian Telegraph
Act, Post Office Act, Evidence Act, and the Reserve Bank of India Act to
make them relevant to the Internet economy,” Rangaraj said.

He cited a World Trade Report on Electronic Commerce which stated that key
e-commerce issues for emerging economies include affordable access and
appropriate legal frameworks.

“Criteria for acceptability of cyberlaws should include open, consensual
decision making,” Rangaraj said.

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