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Thursday, November 6, 1997 Published at 15:04 GMT


India opens up the Internet

India has announced radical changes in its Internet policy to permit private service providers.

The Indian government said it foresaw the number of users increasing from 40,000 to between 1.5 million and two million by the year 2000.

"The new policy is a major step in the direction of strengthening access to information at the national and global levels, as India has a competitive advantage in the field of information technology," the government said in a statement.

The policy takes effect immediately. The announcement ends the monopoly on India's Internet services by state-controlled Videsh Sanchar Nigam Ltd (VSNL). The company will continue to provide Internet services in major cities.

Industry commentators welcomed the policy, saying it will help bring down Internet charges, help a computer software boom and boost private companies' choices in publishing content on the information superhighway.

On the highway "I think it is better late than never. It means great things for the country," said Dewang Mehta, executive director of the National Association of Software and Service Companies.

"We cannot continue to be on the information sidewalk. We have to be on the highway," he said.

The government said it would spend 12 billion rupees (£196 million) on setting up an information infrastructure backbone.

It will encourage banks and financial institutions to support entrepreneurs wanting to enter the field. It said it would allow foreign firms to take stakes of up to 49 % in private Indian Internet Service Providers (ISPs).

Licence fees for private ISPs will be waived for five years, and they will be granted an initial licence for a 10-year period. User fees charged by the service providers would be dictated by market forces, the government said.

Voice services banned The government will also create an Implementation Committee, which it says is to ensure a level playing field. An information technology analyst said this implied a continuing presence of government control on the industry.

The government said voice services on Internet would not be allowed. The duopoly on voice services would remain with the Department of Telecommunications (DoT) and VSNL, it said.

"ISPs may create their own transmission network if authorised by the Implementation Committee," it said.

Because of multiple agencies and competition ... tariffs will come down from 1,200 rupees (£20) for limited hours (at present) to 700 rupees (£12) per month for unlimited usage in the next six months or so," Mehta said.

VSNL currently charges 15,000 rupees (£250) per year for 500 hours.

Multiple gateways overseas The government also said it would allow ISPs to use surplus communications capacity owned by the country's huge railways network, the Power Grid Corporation of India and provincial electricity boards.

The statement said ISPs would "also have access to multiple gateways for international connections, if necessary".

"The government move to allow ISPs to use surplus communications capacity ... will help India create very high-speed domestic networks," said Rajesh Jain, managing director of Bombay-based Ravi Database consultants, Pvt Ltd, which has designed a search engine for India-related Internet sites.

But an Internet entrepreneur said there were doubts about the costs ISPs would incur in accessing state-run facilities.

"The question is we don't know how much we have to pay for the connectivity," said Aslam Shems, president of Combit Advertising Network Ltd.

The government said firms providing basic telephone, mobile phone and radio paging services could apply to become ISPs.

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