BG Group moves into broadband telecoms

Thomas Kutty Abraham

SURAT: British gas and oil company BG Group Plc launched its first foray into

broadband telecoms on Thursday through an Internet services project in Gujarat.

BG will offer broadband Internet services under its global brand Iqara in

Surat, Colin Orr Burns, executive vice-president of Iqara Broadband, told

reporters. The broadband services to be provided through a hybrid fiber coaxial

(HFC) network have been set up at an investment of about $10 million.

BG Broadband India Private Ltd., set up in 2000, will invest a total of $21

million in India and could be extended to other cities, Burns said. "We

chose Surat for our global broadband initiatives because of the fast-growing

number of Internet users and large base of gas customers," he said.

Gujarat Gas Company Ltd., 65-per cent owned by British Gas, supplies gas to

over 130,000 industrial and household customers in Surat and the nearby

industrial township of Ankleshwar. Burns said BG's broadband initiative in India

was a test case for its push further into other markets such as Latin America

and the Far East.

Internet users in India, the majority using dial-up networks, are expected to

switch over to broadband since it offers round-the-clock disruption-free

connectivity. "Being able to stay online, users are able to access the

Internet more quickly and download more efficiently than users on other

networks," he said.

BG Broadband India has laid a network stretching 11.5 km in Surat with 15

fiber knots capable of serving 15,000 customers.

The company will extend the network to 40 km by April 2002 to target a

potential 100,000 customers in Surat on bandwidth leased from Gujarat Narmada

Valley Fertilizers Co Ltd., E.V.S. Chakravarthy, executive director, BG

Broadband India, said.

Burns said BG's broadband initiative was expected to make a profit

"within a reasonable time". BG plans to launch broadband initiatives

in Latin America and the Far East, where it has a sizeable presence in the gas

and power sectors, Burns said.

"We will be taking a decision about our plans in Brazil in about two

months time. By January, Brazil is expected to deregulate their telecom sector

completely and remove a number of potential obstacles to our entry," he

said.

BG Broadband's telecom initiative in Brazil could be in the infrastructure

sector where BG would act as a "carriers' carrier", he said.

(C) Reuters Limited.