India's Ministry of Communications announced late last week that two state-run telecoms, Bharat Sanchar Nigam Ltd. and MTNL (Mahanagar Telephone Nigam Ltd.), will begin offering high-speed Internet services from January 15 at about a sixth of the current prices.

 

The two state-owned telephone companies are planning to roll out 256 Kbps (Kilobits per Second) speed service in six cities as soon as next month. MTNL will launch the services in New Delhi and Bombay, while Bharat Sanchar Nigam will cover Calcutta, Madras, Bangalore, and Hyderabad. Presently a 256 Kbps connection costs on average 3,000 rupees (US$68.30; 1 USD = 43.92 INR). The telecoms have agreed to provide the same services for just 500 rupees (US$11.38) a month, which is 250 rupees less than what that users currently pay for 100-hours use of a dial-up connection that operates at a speed of only 50 Kbps.

 

The overall Internet penetration rate in India remains very low at 0.4%, and the broadband penetration is just 0.02%. The government hopes to raise the penetration rates through a broadband policy that focuses on making Internet access more affordable. The government has set a target of three million broadband and six million Internet users by next December 2005.