Net-over-cable set to enter boom time in India

Kanchana Suggu in Bombay

It's here, and with a host of promises too: surfing on your television set, Internet at unbelievable prices, amazing speeds, 24-hour connectivity, easy access…

It might seem a bit of an exaggeration, but access to the Internet through your television is now a reality and before long it would have reached the masses in a big way.

Consider this:
A recent McKinsey survey showed that there are at least 30 Net-over-cable projects to be unveiled soon.

"Internet through cable is going to leapfrog in the next few months. I know of numerous projects where research and development is going on. The technology for the plan is being put in place," says Dewang Mehta, president, National Association of Software and Services Companies.

"Net-over-cable is likely to capture around 10-15 per cent of the Internet market very soon," envisages Amitabh Kumar, director, Videsh Sanchar Nigam Limited.

Till a short while ago, Internet access was available via the regular dial-up route. What you needed was a modem, a telephone line and, of course, a personal computer.

The scenario, however, is about to be drastically altered. It's time to ring out the old and ring in the new. The conventional dial-up mode of Internet access might soon be passé and Net-through-cable network or surfing on your television may well nigh be the new mantra. However, the transition may take a while.

Fundamentals first. A number of people have already started accessing the Internet through two new means:

1. On your television set instead of the regular PC. This is done using a 'set-top box' that is connected to the TV and telephone line.
2. Through your cable network, the same that brings the cable channels. Internet through this route can be availed of on your computer or even on your television. This does not require the use of your telephone line.

On the television, using a phone line:

A major stumbling block in the Indian PC market is unquestionably the nearly-prohibitive cost of the computer. Although the desire to be a part of the Internet world is widespread, the Rs 40,000-odd tag affixed to any computer, makes the purchase inconceivable for many a middle-class household. It is precisely this price barrier that the set-top box promises to surmount, thus promoting the Internet mania.

A set-top box is a simple device, its main function being to decode and tune digital signals and convert them into a format that can be followed by a television set. This box comes with ports the television set, for the telephone line, for the printer and could also have an in-built VCD player.

A significant competitive edge that the set-top box has is that not only does it bring the Net to your doorstep for a price that is very affordable, the operation too is simple. One can give commands through a wireless keyboard that can be placed at a distance as far as 25-30 feet away from the television set.

Jadoonet, a joint venture unit of Salora International and Infoquest E-commerce, launched its set-top box in February this year. The product, named Jadoonet Classic, costs Rs 5,400 and the freebies include 25 hours of Internet and 4-5 e-mail IDs. Jadoonet has sold close to 4,000 set-top boxes thus far. A figure they are quite pleased about.

"Jadoonet came with the vision of making Internet a mass phenomenon. At present, the Internet experience is restricted to a limited section of the society. Through the set-top box, we want to take the Net into every household. The home is our focus," says Praween Napate, director, Jadoonet.

So far, so good. But what kind of a market does he envisage for the set-top box?

"In India, there are 35 million colour TV homes, of which 13 million also have telephone lines. Our target is all the homes that have colour TV and a telephone line. Let me add that this market is growing at the rate of five million homes per year. And we want to capture at least half a million homes." states Napate optimistically.

Jadoonet is bustling with activity these days. What with tie-ups with Internet service providers, banks, and television majors on the anvil, Napate thinks that in no time the PC will become a thing of the past. Albeit, for the time being, plans are hush-hush. However, in mid-August Jadoonet plans a relaunch of its product and the unveiling of a television channel. First in Bombay and then nation-wide.

"Our product is good for browsing and sending e-mails. People who have a 'PC phobia' will come to us because our product is much more user-friendly. Today, there are just 700,000 homes with PCs in India. However, there are 35 million homes with colour televisions. The set-top box will make up for the lack of a PC in no time," asserts Napate.

While Jadoonet is looking at various collaborations to reach its end user, Vnet -- Videocon International's offering of a set-top box - is relying on Videocon's goodwill. "On a scale of 1-10, we'll bank on Videocon's goodwill at the rate of at least 5. In smaller areas, Videocon's goodwill is much higher. A new player who will enter into this category will take at least two years to establish a strong foothold. Also, we have around five-and-a-half thousand dealers all over the country. So critical mass is not at all a problem," says Nitin Tipnis, head of marketing, Internet products, Vnet.

Vnet has sold around 3,000 units since its launch in February 2000. Priced at Rs 4,990, this product comes with a built-in VCD player and 30 hours of Internet time. "We wanted to offer the set-top box along with an additional item. We think it would help us if it is bundled along with something more so that what our buyers get is a turn-key product," says Tipnis.

So far as surfing the Internet is concerned, Tipnis pegs the set-top box above the PC 'since one can surf in a more casual atmosphere'. Also, activities such as sending e-mail and engaging oneself in on-line chats would become a 'family experience'. "PC sales will definitely drop now. Internet, especially in India, will be driven by non-PC devices," adds Tipnis.

Issues with the set-top box

The set-top box can only be used for browsing and sending e-mails. One cannot download software. Not that this acts as a deterrent for the sanguine manufacturers.

"The world itself is moving towards server applications and virtual hard disk space." argues Napate. Tipnis agrees: "We are progressing towards a situation where nothing is going to be resident on the client's side. So much so that even applications will be rested on the Web." Another issue is that huge telephone bills still cannot be escaped.

To sum it up, it can be said the set-top box is targetted at those who would not want to pay a heavy price to bring Internet to their homes. After all, to become a part of the world wide web for as little as Rs 5,000 is a neat bargain.

Whether the set-top box will actually catapult to success in India remains to be seen. But with more players like BPL and Philips trying to enter the market within the next few months, the competition could sure get tougher.

However, a market with good potential for growth and expansion is imperative to the success of these ventures.

Internet through cable:

Another concept that seems to be gaining momentum is Internet through cable. The underlying principle behind it is that the cable TV wires coming into homes are attached to a cable modem, an external device that connects to your computer to provide high-speed data access via the cable TV networks. This modem interfaces with the PC and brings Internet via the cable technology.

The benefits of this technology are manifold. To begin with your phone line is free, you can be connected for 24 hours, there are no hassle of passwords, text as well as graphic heavy sites download at almost double the speed…

Despite some of these apparent advantages, this concept failed in the West. Industry experts believe that chances are the plan is not likely to meet the same fate in India. The main reason being that the television-PC differential is much higher here than in the West.

Hathway Cable, a part of the Raheja Group of Companies, has launched their services in about 5-6 cities. Says Pravin Shikhande, vice-president, Hathway, "People are interested in high speed. They want to keep their telephone lines free and the best part is that you are always online. It's good for purposes like getting stock quotes and is ideal for heavy users."

Internet through cable is being currently used mainly in corporate offices and upper-class homes. One reason is that a lot of people are not yet aware of this development; another factor is that the cost probably acts as a significant disincentive. A cable modem costs somewhere around Rs 15,000, then one has to incur expenses for installation, pay a monthly flat fee, and shell out additional charges for extra downloads.

In2cable, an investment vehicle of the Hinduja Group, also provides Internet through cable services and has a subscriber base of 500 in Bombay and 150 in Bangalore.

Currently, In2cable and Hathway's Internet services can be availed of only on the computer. For accessibility on one's television, one needs a special kind of a set-top box (not the ones mentioned above). These are not manufactured in India as yet and cost around Rs 25,000-30,000.

"The technology for making this set-top box available for Rs 2,000-2,500 is still being worked out. Once that happens, things will start moving much faster. It might take even two years for the scenario to change drastically," says Dewang Mehta.

On paper, all this seems quite exciting. But any technology can be called a success only when it meets with mass acceptance and usage. Says Mehta, "Two years ago, when I said that Internet would be free, people laughed at me. You never know what could happen next."

Specials

Money

Tell us what you think of this feature