Kolkata : The gloom has been replaced by an air of confidence. The Union budget 2001, did not put any extra burden on the Internet Service Providers (ISP) rather the industry feels it has taken some positive steps to make it more attractive to the probable investors and promoters. Said Mr K Ganesh, chief executive officer, Wipro Net, "The extension of tax holiday for the ISP segment is a positive move and will provide the opportunity for increased investments in the sector. But overall, the levy of service charge on online data retrieval companies (dotcoms)is not a good move and is likely to impact the growth of the IDC , ASP and the dotcom players. Especially the dotcoms because they usually do not see any revenues for the first year of operations, so this will certainly impact on their growth.''For the last few months, the probable investors in the ISP segment were looking at south. The ISP promoters feel that this scenario may change with the government announcing tax holidays till 2003. " I believe the things will be definitely improve for the ISP promoters. Investors will feel more attracted to the market as there will be tax holiday as well as lower duty on the hardware used by the ISPs," said Mr Joe Silva, chairman, CalTiger.com. The demand for Internet service is a derived demand - higher the PC ownership, higher the Internet usage. So no reduction in PC duty will some what dampen the market for new accounts. " It would have been better if there has been a slash in PC price. That would have created a more impact in the ISP market," added Mr Silva. One of the deterrent factors for Internet service market is the imposition of 5 per cent service on leased circuits.
The corporate accounts will have to pay more Internet charge." Though the leased line charges have decreased considerably in the last few months still, corporates at the present price have to pay little extra," said Mr Atul Kunwar, President and CEO, Mantra Online. Mr Kunwar believes that overall the budget is favorable to the ISPs. " On an average there will be a reduction of 1.5 percent to 3.5 percent on the new hardware procurement in areas like switches, hubs and routers," said Mr Kunwar. As ISPs are also taking active interest in the infrastructure market specially in segments like bandwidth infrastructure, tax exemptions will benefit the industry.
Even the pure infrastructure providers are upbeat about the various ramifications of the reformist Budget. Said the executive vice president Mr Mahadeva Mani of the Bangalore-based Exatt Communications which is a full service bandwidth infrastructure provider. ``We are quite happy with the tax exemptions that the broadband, infrastructure segment has got. More importantly the reduction in the duties on equipment for the IT industry is a good step. This will certainly result in a ramp up in the quality of service and provide a viability for this industry.''
Copyright © 2001 Indian Express Newspapers (Bombay) Ltd.
