In India, bandwidth and VSNL have been synonymous. ISPs have cried hoarse about their inability to provide quality service to their customers, putting the blame on VSNL. From slow speed to choking of the gateway, VSNL has been a convenient reason.

With recent policy measures like those allowing private players to set up their own gateways and enter into direct negotiations, for bandwidth, with international satellite vendors, they are shunning their dependence on their competitor-cum-infrastructure provider—VSNL. According to Dewang Mehta, president, Nasscom, "Private players will be the key to bring in international bandwidth in the country."

Impact—cost

The first ramification in the ISP segment of an increased bandwidth can be the lowering of the bandwidth cost. If ISPs are able to negotiate effectively, the cost of acquiring bandwidth can come down drastically. Says Mehta, "Higher bandwidth volumes will mean lower prices and will be in the interest of the consumer." Today a 2Mb Internet-leased line from VSNL costs users about Rs 42 lakh. However, with private ISPs evincing interest in laying their own submarine cables, the costs are expected to fall drastically. Private ISPs like Dishnet have announced 2Mb bandwidths for Rs 2 lakh. Such initiatives will see users getting assured speeds at cheaper rates. Though good for consumers, this could be a bad news for ISPs themselves.

As costs fall, the segment could see many regional ISPs joining the fray and trying to cannibalize the market share of existing players. Currently, the high cost of bandwidth is one of the key entry barriers in the industry. With this entry barrier falling, the competition will only heat up. Access cost can be history. Says Anil Menon, director marketing, Citrix Software India, "It could even become free where people pay for services on the network and not for access." The already heated up access market will witness more instability in terms of access rates.

Impact on services

With the international bandwidth not being a problem, will the consumer have the kind of fast and reliable Net access one only hears about? From the corporate perspective, probably yes. DSL and cable could become a reality faster than we think, given the extra bandwidth. But for the home users, a majority will still be on the dial-up access route. Says Amitabh Kumar, director (operations), VSNL, "Broadband access is expected to remain expensive in India." Hence it will be more common for the corporate users rather than the home users. Adds Kumar, "It is interesting to note that there are only 1.5 million customers using broadband in the US out of a total of 130 million." With Rs 30,000 per annum average cost of the Internet access, it will be difficult for home users to move into this segment.

It will be the corporate users who will take the maximum advantage of the high-speed access. Not only will ISPs cater to this segment but also provide a whole host of services for them. Says Anil Bakht, CMD, Eastern Software Systems, "For businesses, there will be options to work on the Net and use it for all their communications needs, even for tasks like word processing."

With the much-maligned bandwidth not an issue in the country, corporates will be actively looking forward to deploy bandwidth intensive applications like extranets, ASP, videoconferencing and supply chain management. Says Menon, "The ISPs will increasingly transform themselves from being a pure Web mail and access provider to an ASP and a co-locator of data center services."

With assured and quicker bandwidth, users will be demanding service level agreements and quality of service from ISPs. From the end-user perspective, it will be interesting to see if the players can assure service level agreements (SLAs). Currently, VSNL offers shared bandwidth and hence cannot offer SLAs. But with private players also in the game of selling bandwidth, if the same translate in quality services is another question. Says Bakht, "Unless some quality parameters can be associated with the access, what is the point to have access free."

In fact, these will be the key differentiators for ISPs in the years to come. With bandwidth no longer a deterrent for providing services, ISPs will have to increasingly look at providing other non-access issues like security, disaster management, SLAs, quality-of-service, data center design and value-added services to end users.

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