Industry observers say that the move may lead to a situation akin to what one sees in the internet access market -- a VSNL-MTNL price war. However, STPI director PS Narotra discounts such a situation. The proposed company would be run on commercial lines and would bear any cost of using STPI's infrastructure and services, said Narotra. Though non-committal on the issue of pricing, Narotra does not expect it to be very different from that of VSNL.

As a follow-up, STPI is in the process of increasing bandwidth availability from 40mbps to 100mbps by end of the year. Also in the offing is increasingthe number of international gateways, from 10 to 15 by June. The upgradation tab for the organisation would be in the range of Rs 20 crore, say officials. STPI already has a category "A" ISP licence.

The ISP policy announced last year allows private service providers to have their own international access gateways. However, private operators are yet to test the water on due to lack transparency with regard to issues relating to defence clearance. However, some players have mooted the idea of setting up a bandwidth club for sharing of bandwidth.

STPI plans to make a special effort to tap opportunities in IT-enabled services, medical transcription and financial services, said Narotra.