labels: cable and broadband, nasscom, it features
The challengers challengednews
Venkatachari Jagannathan
24 December 2002
Chennai: The cable Internet service providers (ISP) challenged the dialup ISPs. And now it is their turn to face competition. But this time the opponents are really big telecom players like Bharat Sanchar Nigam (BSNL), Bharti Telenet and also one of India’s largest ISP, Satyam Infoway (Sify).

Both the telcos are offering digital subscriber line (DSL) broadband via their telephone line. BSNL uses the direct Internet access system (DIAS) developed by the Intel-invested Banyan Networks, Chennai. On its part Bharti uses Siemens technology.

The unique aspect of their service is that the subscriber can simultaneously use the telephone/voice as well as access the Net. Sify, which delivers wireless broadband through its cyber cafes, has decided to expand its retail presence by targeting households for its hybrid broadband connectivity (See Sify’s hybrid option).

Recently, on an experimental basis, BSNL has started offering the ‘always-on’ (24 hours Net connectivity) broadband service via DIAS in one city in each telecom circle. For Rs 1,800 per month, BSNL delivers 128 kbps speed and does not impose any download restrictions as is being done by cable ISPs and Bharti.

Further, there are no modem costs involved for BSNL customers. The customer also needs to shell out Rs 2,000 as a onetime connection charge, and Rs 3,000 as a refundable security deposit. On the other hand Hathway Cable charges Rs 1,500 for the same speed, while restricting the download to 1GB.

The cable net subscriber also has to bear the modem cost of Rs 7,800 or the modem rent of Rs 500 per month. In all their subscription packages the cable ISPs charge a minimum of Rs 2 per extra MB download. If one goes by the trend in the telecom sector, in all probability BSNL’s rates will be revised downwards.

In the case of Bharti, a 64-kbps DSL connection costs an individual Rs 995 per month with usage restrictions — 100 hours / month and 1 GB download. While the non-refundable security deposit is Rs 3,000, the cost of the modem works out to Rs 8,000. In the case of 128 kbps connection, the monthly rental is Rs 2,900 with a download limit of 5 GB and a non-refundable security deposit of Rs 8,000.

Speaking about the competition from BSNL and Bharti offering DSL connection with simultaneous voice and data access facility, P Kailasam, head, Internet-over-cable operations, Siti Cable Network, says: “While alternatives are coming in, we believe that cable-over-Internet will still offer value for money in terms of cost as well as bandwidth carrying capability.”

Adds Asianet senior vice-president Praveen Shrikhande: “The cable modem prices have been drastically reduced over the past one year. From about Rs.15,000 in mid-2001 it has been brought down to the current price of Rs 6,000.”

A Dishnet DSL official says: “We have a national footprint. That can’t be said of the private basic telecom players. Further one should look at the business focus. Our focus is to provide Net connectivity whereas theirs is telephone connection.” But that focus is sure to change now. “Telcos are now realising the importance of data access service,” says K V Nair, chief operating officer, Banyan Networks.

The one advantage that cable ISPs have over telcos is their flexible packages. For instance, Hathway Cable’s base scheme starts at Rs 650 per month with download restricted to 300 MB and Rs 2 per every additional MB.

In the meantime, the subscription rates of three southern cable ISPs (Siti Cable, Hathway Cable and Asianet) provide an interesting comparison. For an individual householder, Asianet in Kerala offers the lowest rates, followed by the group company Hathway Cable, while Siti Cable is the costliest.

For instance, Asianet charges Rs 880 per month for 500-MB download while Hathway Cable charges Rs 1,000 per month for 500-MB download and Rs 2 for every additional MB. Siti Cable charges Rs 1,500 per personal computer per month for 500 MB downloads and Rs 3 per every additional MB. Further, Siti Cable’s modem costs more than Hathway’s and Asianet’s.

When one looks at the overseas scenario, cable ISPs coexist with other broadband service providers by carving out a niche and offering cheaper and faster access.

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The challengers challenged