De-mystifying the notion that becoming an ISP would cost a lot of money and take long periods for break even, OOPS managing director Kartik Iyer has offered a business model to the contrary. Internet penetration, which is still abysmally low in the country, can have an organic growth only if there were lots of small ISPs, he said while addressing delegates in a Chennai-IIT organised international conference on affordable telecom solutions recently. Small ISPs would be more inclined to provide value by personalising the Internet experience for customers, he said.

The capital goods would cost around Rs 2.55 lakh, VSNL registration Rs 20,000, DoT and analogue line deposit Rs 24,000, DoT-ISDN line deposit Rs 15,000. The typical server costs included in the capital goods would be Rs 1.35 lakh. This includes a server PC (Rs 60,000), 8-port modem card (Rs 60,000), ISDN tariff Rs 15,000.

The infrastructure includes a primary server and a back up server. Variable annual costs would amount to Rs 4.32 lakh. This includes VSNL's unlimited usage of 64 kbps ISDN which is Rs 1.89 lakh for backbone connectivity; DoT ISDN 25 x 24 x 365 = Rs 2.19 lakh and DoT analogue line rental charges Rs 24,000.

A larger ISP had to be identified for the gateway (like VSNL or any private player who offered the lowest rates).

For a base of 100 subscribers, a bandwidth of 64 kbps would be required, for 1000 subscribers 384 kbps and for 10,000 subscribers 2 mbps would be required, he said. About 10 dial-in lines would be required for 100 subscribers, 90 lines for 1000 and 800 lines for 10,000 subscribers. Iyer suggested that the dial-in lines could be distributed equitably with analog lines and ISDN to avoid overcrowding of wiring. For a start-up ISP targeting 100 subscribers, it would be adequate to have three low cost Linux PCs, one ISDN line and equipment for backbone connectivity and eight analogue lines and modems to dial in.

The servers would be all Linux solutions with one terminal server able to handle eight simultaneous 33.6 modem connections on a 64 kbps ISDN backbone link. The other two low cost PCs will serve as primary and secondary servers for services such as e-mail, web, DNS etc. A possible revenue scenario suggests a revenue of Rs 6 lakh per annum with 25 hours per month at Rs 20 per hour on a base of 100. Unlimited access charges could range at Rs 500 per month to Rs 750 per month (for a revenue of Rs 9 lakh per annum).