In India, the height of frustration these days is waiting 15 minutes to check Yahoo mail, even when one has set the browser to not display any animation, audio, or video. And this problem plagues not just home users on dial-up connections; executives at corporate offices face much of the same. It is well nigh impossible to operate on three to five dial-up accounts for 50-plus employees. Leased lines, the faster options, are often down. Without any service agreements with Internet service providers, quality of service is a myth, leaving corporate and home users at a complete loss. All of these indicators point to the painful truth that India’s tryst with being part of the online future falters in the face of acute lack of sufficient bandwidth.

Growing Demand

out of Step with Supply

Indians signed on to the Net for the first time in August 1995 when Videsh Sanchar Nigam Limited (VSNL), a government monopoly for international telephony, launched India’s first Internet services. By late 1998, although India had opened up its ISP segment to private players, bandwidth still remained under VSNL’s monopoly. Unlike the earlier examples of licenses, high entry fees and strict regulation in terms of number of players in a segment, the ISP policy was a watershed in India’s policy-making history. The ISP policy announced that there would be no fee for the first five years and a token fee of Re. 1 for the next five years. This policy ushered in the expected: Companies big and small moved in to become ISPs. Since late 1998, the number of ISP wannabes has grown to 397 while 72 players have actually started their services.

However, VSNL’s bandwidth-providing capacity remains slow. In the past year, for example, the country’s sole bandwidth provider has ramped up its capacity to 325 MB. Fuelled by increased Net usage in the country, falling access costs due to competition among ISPs, and continuous demand for improvements in access speeds, the demand for Net access has exceeded expectations, growing by 100 percent year over year. This unprecedented growth has crimped per capita bandwidth availability at as low as 4 Kbps. Compare this with the per capita US consumption of 2 MB.

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