Zee to Launch Cable-Net Service by October

Zee Television Ltd. (Zee TV), the satellite channel major of India, will launch its nationwide cable-based Internet services on October 1.

Subhash Chandra, chairman of the Essel Group, which owns Zee TV and Siti Cable, indicated that work on infrastructure has already started and would be completed in time for October launch to coincide with the seventh year of Zee operations.

The Essel Group, which has pocketed a category A ISP license, aims to
provide businesses and households across 40 Indian cities Internet services
and a host of other services including high-quality, high-speed voice,
data and video transmission.

Zeenet, Zee TV’s Internet arm, and its sister company Siti Cable are in the
process of wiring India through the latter’s cable network. Siti Cable,
which already provides Cable Television (CaTV) services to nearly 5 million
households in India, is aiming to provide Internet services to at least
10 percent of all CaTV households. The Essel Group has earmarked US$125
million in this project in the next 4 years.

The Zee chairman declined to comment on the pricing and marketing game plan,
but said that his venture into Internet service would concentrate on the
content and access features in the beginning and evolve on a continuous
basis afterwards. However, company officials have said that Siti is
looking at a target of 30,000 subscribers for the first year, inclusive of
dial-up connections.

A normal telephone modem in India transfers data at the rate of 36 Kbps and
Zee’s project envisages data transfer at a speed which is over 800 times
faster. The cable network will have 40 Mbps of bandwidth at its disposal.

“We may be able to capture 10 percent of the Internet market in the four major metro cities in the first two years,” sources said.

The main hurdle in the initial years is expected to be the cost of the cable
modem which is currently retails for around US$450 to 500.

“Costs will, however, decline since manufacturers have agreed on open standards for
cable modems. Prices have actually came down from $1,000 six months ago to around $450 currently,” pointed out C. S. Arora, general manager of Siti Cable Network.

To try and keep the services accessible during initial weeks, Siti also
plans to rent or lease out the cable modems. But eventually, as prices climb
down, subscribers will have to buy their own modems.

“We do not plan to be
in hardware business,” said Arora.

Currently, however, all cable modems available in India, including Cisco, 3Com, Bay Networks and Motorola, have to be imported into the country. “Maybe
at a later stage cable modems will be manufactured in India and their
prices would fall sharply,” said one observer.

The network will also offer businesses value-added services through
application service providers. Network computer users, operating with a
set-top box will be able to use applications via network servers.

Siti’s competitor, the UK-based Hinduja-owned cable company
In-Networks, is also expected to get into the act shortly.

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