"The joint venture will operate as a full-fledged internet service provider in the region, integrated with the backbone internet service infrastructure," Reliance said in a statement. The project cost for the first phase is likely to be in the region of Rs 400 crore (US $ 90 million).

The Tamil Nadu government, through its arm Electronics Corporation of Tamil Nadu (Elcot), will contribute 26 per cent of the equity in the project, while the remaining equity contribution will be shared equally between Reliance and WorldTel.

``This is the first major Information Technology (IT) and Telecom project under the New Telecom Policy (NTP) of the government. The joint venture project will network Tamil Nadu's villages and towns with each other and the rest of the world through the CICs, making it thefirst state in India to initiate mass application of information technology,'' the statement said.

Commenting on the joint venture, Sam Pitroda, the chairman and chief executive officer (CEO) of WorldTel, and a former chairman of the Telecom Commission, Government of India, said: ``We are delighted to have Reliance as a partner, which brings a thorough understanding of the Indian markets and environment, global expertise in implementing large and complex projects, and tremendous financial strength, to the joint venture. With Reliance as a partner, we feel confident of achieving our mission of internet access for all in the next millennium.'' Mukesh Ambani, Vice Chairman and Managing Director of Reliance group's said: ``WorldTel, under Sam Pitroda's leadership, would bring an international perspective and a deep understanding of India's special needs, to the joint venture.''

The joint venture will operate as a full-fledged internet service provider in the region, integrated with the backbone internetservice infrastructure. It plans to create at least 1,000 CICs in Tamil Nadu, in the first phase, with about 2 to 20 computer terminals in each centre. The CICs will be created on a franchise basis, and will also offer several other business As per the estimates of the state government, the CICs alone will generate direct employment opportunities for up to 50,000 persons in Tamil Nadu.

The states will further benefit from rapid development of the IT based industries due to availability of high quality and low cost infrastructure.