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Cable is the fastest way to put India on information highway

India’s lack of infrastructure has not deterred Internet firms from entering the crowded market and some have approached it with an array of technological solutions, including the country’s chaotic cable television network.

In a country where there are not enough telephone lines, Internet on cable television could be the fastest way to grow, Mohana Pillai, president, Pacific Internet (India) Pvt Ltd, told in an interview.”Cable in India is quite unique, the only place on earth where you have more cable connections than phone connections,” Pillai said, but added that this was not the only technology Pacnet was adopting.

“You have between 30 and 40 million cable points and I don’t think there are even 27 million telephones yet, Pillai said. Pillai said another advantage of accessing the Internet market in India through cable television was that it was unregulated and was not subject to India’s stifling bureaucracy.

String it through the trees “The flair for private enterprise in India is very high, so people throw cables over trees and buildings and you have a cable system. Whereas for phones, you have a government monopoly, a bureaucracy that moves at a very deliberate speed,” Pillai said.

A limiting factor though is not all the cable is Internet ready and Pacnet’s partnership with the expatriate Indian-owned Hinduja group was meant to solve the problem.

But the partnership failed as Pacnet and the UK-based Hinduja group, which runs a cable television network in India, could not agree on how much stake each side should get. Pacnet is now seeking another partner to provide Internet through cable TV, but in the meanwhile is also using other technologies like the conventional telephone, modem links and the new asynchronous digital subscriber link.

Pacnet is not wedded to any single technology and would adopt whatever the market dictated, he said. “We are technologically agnostic. The market characteristic says cable should go first, we will go cable.” Pacific Internet India, a fully owned subsidiary of Singapore based Pacific Internet Ltd (Pacnet) , the only wholly foreign-owned Internet Service Provider in India applied for a license in 1998 and faced several bureaucratic hurdles.

It launched its service only three months ago, has got 15,000 subscribers in three cities, and is aiming to raise the number to 150,000 within the year. “We will double the number of subscribers again in 2001 and hope to be among the top five ISPs in the country,” he said, but declined to give any revenue projections.

Merrill Lynch in a report last month estimated the number of Internet subscribers in India would rise to two million in 2001 from 850,000 this year.

Pacnet, a unit of the Singapore-government owned multi-industry group SembCorp Industries Ltd, operates as an ISP in Singapore, Australia, Philippines, Hongkong, and Thailand, and has a total of 350,000 subscribers at present.India, which recently joined China to become the only countries in the world to have a billion people, could be Pacnet’s largest market in subscriber numbers, Pillai said.
The company would raise funds domestically to expand its Indian operations, he said.”I think we are probably looking at anywhere between nine to 18 months,” Pillai said when asked about plans for an initial public offering in India. He declined to put a figure on its likely size.

In the past three months, Pacnet’s shares on the Nasdaq have fallen along with the rest of the sector, falling from $74 7/8 on February 18 to $22 on June 2.