Ever since e-mail service providers usa.net and 123india.com announced their intent to charge users, there has been a backlash with a significant number of users migrating to other free services. E-mail and chat, long taken for granted as free services, are not likely to remain so. But hang on, it’s not as bad as it sounds. Not everything on the Internet will be charged, except a range of premium services which could be packaged differently by different providers.

Let’s understand the scenario in perspective. The dotcom boom which emphasized on eyeballs, had everything going for it but revenue models. Similarly, e-mail providers need more than just a subscriber base to sustain business.

At the same time, it is also a reality that e-mail is the main driver for Internet penetration in India with 95 percent of Internet users accessing e-mails. The other two drivers for Internet usage are job-seeking in rural areas and pornography in urban areas. Therefore, e-mail service providers were technically sitting on a gold mine.

While service providers like usa.net at the global level and 123india in India have taken the initiative, others are sitting on the fence and watching the outcome of such initiatives.

Well, there are gainers, too. Sources at Rediff say, "We have noticed a phenomenal increase of 20-25 percent in registration at our site and it is just no coincidence. 123India.com and usa.net users have migrated to our site." Analysts believe that Yahoo! and Rediff, both with dominant mindshare in India and both free, stand to gain from such migration.

However, the industry is unanimous that paid services are here to stay. Sure there will still be many free service providers, but there will be premium services built around their fare. Premium services will come in the form of POP downloads, spam filters, higher storage space (123india.com offers 10 MB of space to its premium customers and usa.net offers 25 MB of space).

Is the Indian user willing to pay? Contrary to the popular view, the answer could be yes. For one, e-mail has become a habit and perhaps one would not mind paying a little bit for getting quality. Also, there have been cases when the Indian customers have displayed a willingness to pay for quality service. Says Prasanto Kumar Roy, group editor, business magazines, Cyber Media (India) Ltd, "PObox.com has been an extremely popular service in India since its launch in 1995. So much so they had a special focus on India and set up an office here while they were operating through partners in other countries." PObox is a service that redirects mails to a single mailbox and was a particularly useful service in the early days in India when e-mail addresses were very lengthy.

At $15 per annum, it still has a loyal subscriber base.

Apprehensions abound that paid e-mail service could deter rural and semi-urban users and prove detrimental to Internet penetration. Such fears are allayed by Sanjeev Swarup, senior manager, 123india.com, "In fact, we are banking particularly on this profile of users. Typically such a user would be a serious user, using it for professional or educational purposes." It all gets down to a simple logic. "The rates are anyway going to be marginal".

Balaka Baruah Aggarwal