``DoT has plans to set up its own Internet backbone covering 40 cities in the first phase, involving an investment of about Rs 200 crore. Orders are likely to be placed soon and work will start in next three months,'' Parameswaran said at a workshop on e-commerce organised by the Federation of Indian Chambers of Commerce and Industry (Ficci).

He added that DoT would have to increase the bandwidth and other facilities for easy Internet access. The entire project would be completed by the middle of next year, the DoT official said.

The project would mainly help the Internet services providers (ISPs) in the smaller cities. According to the DoT official, out of the 132 licences issued by the telecom department so far, 67 were for the smaller cities.

TheDoT infrastructure would supplement the efforts of the private ISPs eventually creating an effective and easy connectivity for the Internet subscribers. Elaborating further on the Government's guidelines for setting up international gateway by private ISPs, Parameswaran said that an inter-ministerial group had been set up for the necessary security clearances on case-to-case basis.

The guidelines announced yesterday allowed ISPs to set up gateways within the operating area of the private players. He said that DoT would invite applications from the ISPs formally from Monday and an amount of Rs 20,000 would be charged as processing fee.

When asked about the number of private ISPs who had already approached the department, Parameswaran said he had not yet received any official confirmation and would be able to finalise within 15 to 20 days after the provisional applications are issued to the ISPs.

Along with state-owned MTNL, Hyderabad-based Satyam Computers, BPL and few small players have already showninterest in setting up a gateway. The applications can be downlo

MTNL to launch on-line billing

NEW DELHI: Mahanagar Telephone Nigam Ltd (MTNL) will launch on-line billing and payment for its services from August 15 to foray into world of e-commerce even though the cyber laws regulating net-based transaction is yet to be implemented.

"We are talking to some banks for arriving at a tripartite agreement involving MTNL, bank and the customers to make this feasible without any legal hassle," MTNL chairman and managing director S Rajagopalan said here.

Besides the billing and payment system, MTNL would also allow the customers to register for new telephone connections in Mumbai and Delhi where the company is operational, he said. The new facility also consists of shopping malls and other attractive programmes already offered by the company in the country which include the free toll call facility, he said at a seminar on E-commerce for media organised by FICCI.

"In the initial stage the on-linepayment facility would be allowed only to those having bills up to Rs 2,000 and this covers approximately half of our subscriber base in the two metros," he said adding that orders for equipment were already in place.

In order to smoothen the transactions MTNL would tie-up with private internet service providers (ISPs), besides the banks to provide a strong bedrock for the programme.

Rajagopalan said that tie-up with banks for transacting on the internet was necessary as electronic signatures were still not acceptable. Asked about any problem in the absence of cyber laws in place, Rajagopalan said MTNL would not be the first one to start these services. Other private ISPs were also transacting business on e-commerce, he added.