MUMBAI, APRIL 12: Making internet kiosks as ubiquitous as STD/PCO booths could be one of the most expensive dreams to happen in India in recent times. The project cost already stands at $ 600 million and threatens to cross $ 1 billion (around Rs 4,267 crore) in a couple of months, as more states plan on similar projects.Not surprisingly, the man involved making this extraordinary dream happen is Sam Pitroda, first chairman of the Telecom Commission, and widely perceived as the force behind the proliferation of STD/PCO booths.
Returning as chairman and CEO of WorldTel, a UK-based corporation initiated by International Telecommunications Union, Pitroda has already signed MoUs with six states for setting up internet infrastructure and establishing Internet Community Centres (ICC). The seventh state to join this initiative for setting up ICCs is Maharashtra. The proposal is currently under consideration and the state government is expected to take a decision in a week's time.
What are ICCs and how are theydifferent from cybercafes? For one, they will not be merely places to chill out and surf with a cuppa. The ICCs will be more like business centres equipped with other communication facilities like fax, e-mail and copying. They will have access to local content and databases in local languages.
"This is one reason why state governments have been involved in the project,'' explains Pitroda, "Without government involvement we cannot put all the state forms and procedures on the net." According to the plan, state governments are required to pick up 26 per cent equity in the project. The remaining 74 per cent will be held equally by WorldTel and a joint venture partner, yet to be finalised.
"We spend a lot of time dealing with the government in this country -- be it for land records or birth certificates." The ICCs will eliminate this to certain extent by making all this information available online. The number of ICCs and their locations could vary from state to state depending on financial viability anddemand. And like STD booths the ultimate goal is to make them available in every city, town and village street corner.
In Tamil Nadu, for instance, WorldTel has decided to set up 1,000 ICCs in the first phase and increase it to 16,000 in five years. The state government has already committed an investment of Rs 52 crore in the project and the first kiosks will start functioning a year from now.
But the most expensive part of the entire project is not setting up ICCs but the infrastructure for it. The infrastructure involves laying costly optic fibre cables which can transmit data efficiently and speedily. This data network will be the primary source of revenue for WorldTel. "The revenue flow will be directly related to people who want bandwidth. It could be ISPs, schools, libraries, government offices, hospitals, private offices ... anybody who needs bandwidth," says Pitroda. Right now, most of these organisations either do not use the net or rely on telephone lines for the service. WorldTel's networkwill be the first real network built-for and dedicated for data transmission.
In fact, WorldTel may have beaten major carriers like MCI in getting to India. "It could be a very big project -- a several billion dollar project. Bigger than what we have implemented in Mexico because it is a bigger country and the internet is going to much bigger here," says Pitroda. WorldTel has implemented a $ 1 billion project in Mexico in partnership with Bell Canada and one of the big business families there.
In this case, however, Pitroda does not as yet see any need for partnerships with international telecom companies. "There is a great deal talent in India that is under utilised -- that I would like to utilize, says Pitroda, "Besides, once we finalise our Indian partner is, we will decide what additional help we need from outside."
Sure, international telecom companies would be interested. Says Pitroda, "Everybody would be interested. Why wouldn't they be interested -- because we've done all work organising it,"asks Pitroda, "If we need them we'll get them. The option is ours."
Under the current structure, there will be local companies in each state with state government partnership and the holding company would be WorldTel along with a joint venture partner.
Implementation is yet to begin in any of the states. Tamil Nadu will be the first to get off the mark followed by the others -- Gujarat, Andhra Pradesh, Kerala, West Bengal and Gujarat. Delhi, Punjab, Rajasthan, Orissa and Uttar Pradesh have also approached WorldTel but Pitroda is keeping it on hold because "we are not sure we can serve that quickly."
The company has a legal team in Mumbai to look into all the central government permissions which are required. It is still not clear how such a massive project will be funded. The firm is currently looking a 50:50 debt to equity ratio and is talking to domestic institutions like ICICI and IL&FS, apart from overseas institutions involved in infrastructure funding. World Bank funding, however, is big no,although the International Telecom Union is part of the United Nations. "It takes too much of time and we are not prepared to spend that much of time," says Pitroda.
If Pitroda can replicate the success of the STD/PCOs booths with the internet, it would not be exaggerating to say the consequences will be of extreme significance to the country.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.