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Indian Internet Portal Rediff.com (ticker: REDF) reported Q2 results on July 28th. CEO Ajit Balakrishnan was asked about the cost of Internet access in India. Here's my rough transcription of what was said:

Vik Mehta, J Goldman analyst:

...Could you also give some commentary about what you are seeing with regards to the price of Internet access, both narrowband and broadband, what that is on average right now, what might it have been a year ago?

Ajit Balakrishnan, Rediff.com CEO:

First of all, Vic, remember that roughly 60% of access in this country, like China, comes through Internet cafes. When you talk of access that's a really important element now. The typical cost of Internet access in an Internet cafe is roughly between 15 and 25 rupees per hour. (You can take 45 rupees to the dollar roughly, approximately. So about 20 cents, something like that.) One of the interesting things is that many of these Internet cafes, of which there are about 65,000 in India now approximately, many of them, at least the top ten to twenty percent, have become broadband. That's been the major development of the last about 12 months to 14 months.

Vik Mehta, J Goldman analyst:

About 10-20%, you say?

Ajit Balakrishnan, Rediff.com CEO:

Yes, about 10 to 20% are broadband. The reason for the approximation is that some have both narrowband and broadband within the same cafe. So basically about 10-20% have it.

Now, so far as home use is concerned, typically it accounts for -- about 15-20% is from homes, and home use can either be -- at the moment it's predominantly dial-up, and dial-up costs something in the order of magnitude of about 500 rupees for a 12 month connection, roughly. That's $10 per year for a dial-up connection, with certain restrictions in terms of the number of hours and so on.

Recently there's been a push by the state-owned telecom provider, VSNL, to expand the broadband connections, and broadband -- they define that as three specific Kbps lines. And they are currently attempting to market it at roughly 400 rupees per month, which is about $9 per month. They've just launched this plan in the last 3 or 4 months, and they are getting some degree of traction for that.

These are the elements for offices. Access from offices comes free for employees, so there's no price attached to that. And that, on balance is about 25-30%...

Audio reply of the entire conference call (WMA file) here.

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Source: Rediff.com Discusses Internet Access in India (REDF 2Q05 conf call quotes)