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BANGALORE: Tata Internet Services Ltd, part of India's biggest industrial
conglomerate, the Tata Group, plans to spend about Rs five billion ($107
million) over three years to offer Internet access and related services, a
senior official said.
"We plan to offer access, content and value-added services," the
company's chief marketing officer, Vinod Giri, told Reuters in a telephone
interview from Mumbai. The money will be invested to build Internet
infrastructure. Tata Internet will spearhead the Tata Group's foray into India's
crowded Internet access market, forecast to have 15 million Net subscribers by
end 2003 from the current two million.
Giri said the firm will launch Internet access in five metros by mid-March
under the TataNova brand name. It plans to set up Internet gateways in Mumbai,
New Delhi and Hyderabad.
The company joins many Internet providers, which are setting up dedicated Net
gateways in India to increase and improve the quality of bandwidth, or network
capacity, and attract more customers in the long run. Tata Internet Services is
a fully owned subsidiary of Tata Industries Ltd., the Tata Group's vehicle for
investing in the new economy.
"We don't think we are too late to enter the market. Yes, there are a
lot of companies already in this game, but this business is highly capital
intensive and there are not many firms which have a long-term approach,"
Giri said.
The top four to five Internet access providers in India account for a lion's
share of the market, which now has over 200 players after private firms started
services about two years ago.
State-run telecoms firm Videsh Sanchar Nigam Ltd. is the leader with 550,000
subscribers followed by Satyam Infoway Ltd., the largest private sector firm,
which has more than 400,000 subscribers.
"We are realistic and know that it will take us at least three years to
make money," Giri said. Tata Internet plans to meet the funding for its
business through internal resources. The Tata Group has a combined turnover of
over $8 billion with business interests in automobiles, steel, information
technology, commodities and hotels.
Giri said Tata Internet planned to offer stakes to group companies but Tata
Industries would continue to have a substantial holding in the Internet firm.
Tata Internet currently has five consumer-oriented portals, which include a
travel, automobile and women's site. It plans to set up data centers and
business-to-business exchanges with group companies.
(C) Reuters Limited 2001.