Videsh Sanchar Nigam Ltd (VSNL), the largest Internet service provider in the country, has decided against entering the e-mail price war triggered by USA.net and the domestic portal, 123india.com.
A senior company official said, "We are watching the situation and will definitely abstain from fixing any tariff on our existing individual e-mail subscribers. We think the decision of our competitors is being driven by the viability of their business in the current condition."
USA.net and 123india.com have recently begun charging their e-mail users. 123india.com has set a tariff of close to Rs 600.
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Many cash-strapped dotcoms are also in the process of evaluating such possibilities to rake in revenues in the country.
This situation has lead into major advertisement campaign by some of the leading dotcoms in the country.
Yahoo!, in an advertisement said: "Yahoo! Mail and messenger services continue to be free. Over 200 million Yahoo! users worldwide trust our services."
If VSNL, which has a net subscriber-base of more than five lakh, finalises some tariff for sending e-mail, it will hit its entire user base.
"Though it may be a necessity at a later stage, VSNL will not resort to do anything for the time being. Dotcoms are facing trouble to rake in revenues. So they will have to take up this kind of measures," said the official.
According to analysts, if adopted, this revenue model will offer a major reprieve for VSNL's Internet business as it serves more than half of the country's Internet subscribers.
It will create a situation wherein other dotcoms will be forced to begin e-mail fees.
Dotcoms, which were expecting revenue streams through e-commerce arena, are also facing difficulties. Law awareness and poor infrastructure are the two key barriers for the development of e-commerce.
According to estimates, the Internet subscriber base in the country is expected to surge to 15 million by the end of 2003 from about 2 million now.