Chennai: In what could be termed as 'biting the bullet' effort, Tata Teleservices, a basic telephone services provider, is partnering with n-Logue Communications, a rural Internet service provider (ISP), to offer telephony and broadband Internet to several villages in Tamil Nadu.
As per the agreement, n-Logue will act as Tata Teleservices franchisee in four short-distance charging areas (SDCA) - Bhavani, Vaniyambadi, Gudiyatham and Mayavaram - and establish the network to offer telephone and Internet services through a chain of kiosks.
Using corDECT wireless in the local loop (WLL) technology (See 'A global winner') n-Logue is expected to set up around 400 Chiraag kiosks that would offer telephony (ISD/STD), Internet (70 kbps speed) and a host of other services. The Tata Tele-n-Logue tie-up for these four SDCAs is an exclusive arrangement (See 'n-Logue's digital edge to rural India').
Says Tata Teleservices chief operating officer R Balachandran: "This is not the only easy way for us to cover all the SDCAs in Tamil Nadu. We decided to tie up with n-Logue mainly because of its potential in changing the face of rural India. Based on the reception we will extend the franchisee agreement to other SDCAs, or even nationwide."
For the two-year-old n-Logue, the tie-up is a major turning point as the success in the four SDCAs could result in a gradual statewide as well as nationwide tie-up with Tata Teleservices, which has presence in six telecom circles.
While declining to divulge the financial details of the tie-up, P G Ponnapa, CEO, n-Logue, says: "The costs will be shared between the two companies; so will the revenues." Adds Dr Ashok Jhunjhunwala, head, Department of Electrical Engineering, Indian Institute of Technology, Madras, and the man behind the corDECT technology and all the ventures promoted by the TeNet group: "This deal will accelerate n-Logue's growth."
With the telecom connectivity tied up, n-Logue will now have to look out for local entrepreneurs in the four SDCAs to act as local service provider - akin to multi-system operators in cable TV industry - who in turn will appoint kiosk operators.
Tata Teleservices, meanwhile, has ramped up a subscriber base of 25,000 in the three cities (Chennai, Coimbatore and Tiruppur) where it has rolled out its services. "Of that, 1,000 are public call-office connections. While code division multiple access (CDMA) WLL accounts for a major portion of our subscriber base, fixed wireless connection also accounts for a good share."
The company is talking with the Tamil Nadu state government for permission to dig up roads and lay its cable to offer conventional wire-line connections.