At a time when Internet is all set for an explosive growth in the country, standalone Internet Service Providers (ISPs) are exiting the business.
The number of small entrepreneurs who have surrendered their ISP licences to the Government has crossed the 500-mark as they find the business tough.
Only about 150 Internet companies remain operational even though 903 licences have been issued by the Department of Telecom till date.
Industry experts blamed poor Government policies for the exodus.
“When the Government opened up the Internet space for private players, many entrepreneurs came forward thinking that they can leverage the demand. But over the last 10 years, standalone Internet companies have got a raw deal,” said Rajesh Chharia, President, Internet Service Providers Association of India.
The Government policies have all focussed on large telecom companies while standalone ISPs were curtailed from offering full suit of services.
As a result, Internet players lost to large telecom companies. For example, in 2004, ISPs were stopped from offering Virtual Private Network services which were part of their initial licences. But when Bharat Sanchar Nigam Ltd started losing business contracts to small Internet players, the Government took a view that VPN services (used for providing connectivity to multi-location corporates) was not part of the Internet licence. This resulted in the ISPs losing nearly 60 per cent of their revenues.
Read More . . .