BSNL NovatiumIn what appears to be its largest deal yet, thin client company Novatium has signed a deal with government owned telecom operator BSNL to offer its Nova NetPC at Rs. 2999 (plus taxes), reports the Hindu. Details available on the pricing of the service are sketchy – just that the monthly subscription for the NetPC will be Rs. 175, while broadband connectivity is for Rs. 99.

As we’d mentioned earlier, the Nova NetPC comes with a fine print of additional charges: for example, the NetPC, when offered by MTNL, was priced at Rs. 4999 for installation and Rs. 399 per month. When you add the charges for a new MTNL landline connection, a new broadband connection, phone charges, modem rental, registration, installation and Nova Service, it came to Rs. 6698.96 ($146) and Rs. 616.86 ($13.5) per month, inclusive of all taxes.

The pricing hasn’t been put up on either Novatiums or BSNLs websites – which is a real shame, since one would expect Internet companies to at least make their tariff plans available online, on launch. Nevertheless, this is Novatiums most important launch yet, because BSNL has the largest wireline network in the country, and in particular, reaches out to B&C class towns where this may find takers. Their past deals have been with MTNL (Delhi and Mumbai only) and Tata Teleservices Maharastra (Maharashtra).

Why BSNL & MTNL

In India, the last mile hasn’t yet been opened – one of the great tragedies of telecom regulation and policy in the country. This has not only killed competition in the wireline segment, but let to a significant migration from wireline to wireless services – resulting in a continuous decline in the wireline user base. Nevertheless, aided by the government policy, public sector telcos still own a significant majority of the wireline connections:

bsnl mtnl wireline marketshare

At the end of June 2008, BSNL and MTNL combined had around 34.5 million wireline connections, of the total 38.92 million wireline connections – around 88% of the market. BSNL, in fact, has 99.78% of the rural market wireline connections, and 70.91% of urban. Add to that the facade that the government wants to live up to of providing low cost PCs and broadband to the poor, and you have a PR dream-come-true for the telecom ministry. 

The RCOM Challenge
I’m not sure if it’s much of a challenge, but perhaps the most significant development in the Internet space over the past year has been Reliance Communications offer of a laptop with a (poor) wireless Internet connection. Comparing with Novatiums deal with MTNL – MTNL-Novatium works out to Rs. 28905.92 (including taxes) for three years with the fixed line connectivity and the thin client, while RCOM is Rs. 36,000 with taxes extra for (poor) wireless connectivity and a laptop.

Rohit Sharma of Zapak asked yesterday at the IAMAI Digital Entertainment conference, for ideas for an increase in broadband penetration. Some ideas in the comments here.