Portal mania hits Global, Crest - Views on News from Equitymaster

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Portal mania hits Global, Crest

Mar 13, 2000

According to newspaper reports, Global Telesystems and Crest Communications Limited are entering into a 50:50 joint venture to provide entertainment and infotainment over the Internet. While Global Tele will be providing the infrastructure, Crest will supply content for the portal. The venture plans to deliver content via cable (broadband) and is currently negotiating with international companies for direct to home telecast (DTH) services. The portal would also provide facilities for e-commerce.

The two companies bring a complementary set of skills to the venture content and infrastructure. This should hold the company in good stead. However, the concern pertains to the delivery medium cable. In view of Zee and other large cable operators already having gobbled up large networks, there is not much scope in (at least) the metropolitan areas. Moreover, these companies (and definitely Zee) themselves are launching portals to cater to these needs of households. Therefore it is unlikely that the company will get easy access to cable networks. On the other hand, setting up a network, is a very costly proposition.

The other alternative being pursued by the company is DTH. Here again there are two major deterrents. First, guidelines for such services are still unclear and this has delayed the launch of these services. Lastly, access to such a service involves investment in set top boxes, which may again prove to be a deterrent for the masses.

The portal mania has gripped a large number of companies across various industries. Although the demand for entertainment is larger, the delivery mechanism holds the key to success.

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