With the dotcom valuation game going bust and e-commerce yet to take off, Indian Internet service providers (ISPs) are betting their future investments on a range of value-added services, instead of plain Internet access.
As the ongoing shakeout takes its toll on the market, leading players said that efforts were on to focus on innovative value-added services which would generate revenues, that were dwindling on account of downturn of the market.
With the valuations deteriorating and venture capitalists tightening their fists, this time around all ISPs have realised that the cost of retaining, servicing and acquiring dial-up customers would be far greater than the revenues that accrue per head.
According to Mantra Online, one of the largest ISPs in the country, the price and value segmentation coupled with cross-promotions to lure the consumer could be viable models for now. The future, however, would lie in customer relationship marketing (CRM) initiatives that ISPs would need to adopt.
Net4India launched “Internet key words”, a layer on top of the normal dotcom domain name which allows customers to come to a specific page within a Website in a relatively short time span and hence reduces the time taken by customers to go to specific Web pages.
Mahanagar Telephone Nigam Ltd. (MTNL) which has also jumped onto the ISP ring plans to use new technology to improve the lucrativeness of existing cable players so that it can both provide voice over Internet protocol (VoIP) business and Internet.
Data Access India Ltd., the Delhi-based ISP, said that it would be introducing various value-added products continuously to offer choices to its corporate and direct subscribers.
The company has invested Rs 120 crore in infrastructure which is fully equity-funded Data Access has launched Now ISP services in Delhi, Mumbai, Chennai and Bangalore recently which has been the largest ISP deployment in India with 16,000 ports in 5-6 months’ time.
So many licences have been taken by ISPs because there is no licence fee. Also there was the hype associated with the Internet and not many limitations being present in the scope of services. Mostly licences were taken in a bid to start some skeletal service and then sell it off or merge it with some other ISP.
The reluctance of players to enter the Internet services game can be gauged from the fact that only 98 had started services as on December 15, 2001, while the licences have been issued to 437 ISPs, 79 in category A, 177 in category B and 181 in category C.