The PC will be delivered at Rs 1,999 (plus taxes) without a monitor (optional at an extra cost of Rs 3,000). There's an additional monthly subscription of Rs 399 which includes 30-hour internet access (works out to an hour of surfing every day).

Unlike the normal PC, Nova netPC does away with many hardware requirements like a central processing unit or CPU. It, instead, uses a central network server to run software applications and store data. Some of the components include a keyboard, screen, universal serial bus (USB) ports.

Alok Singh, CEO, Novatium Solutions, said, "Our focus has been to give the customer all the experiences that they generally have when they use a normal PC. They can do everything that they have been doing online. But if you are looking at services like programming capability, etc., it will not be possible as the system works on a shared network."

"We are trying to reach areas which have an existing broadband network. Hence, tying up with MTNL made perfect sense. We are aiming at a subscriber base of 25,000 in Delhi, (we already have a set-up for 20,000 subscribers). We will then move on to probably Mumbai due to MTNL's reach. We are also in talks with other operators for other areas. We are not a non-profit organisation so before we move to rural areas, we will tap the urban markets," he added.

Analysts are a bit sceptical about the viability of the project. However, they feel this concept can be successful in certain segments. Diptarup Chakraborti, principal analyst, global IT research and advisory firm Gartner, says, "Initiatives with the low-cost PC have not attained the much-desired success. Today, people buy PCs for more than just surfing the net. It does have its own merits and can be a effective solution for the educational segment."

Chakraborti feels this model could be targeted at first-time users or among the lower-middle class segment and for those who go to cyber cafes for surfing the net.

According to Piyush Pushkal, manager, computing products research, IDC India: "Price as the sole criterion to increase PC penetration will never work. You will need the right applications and a complete eco-system for users to adopt regular and frequent PC usage. How successful will this initiative be, only time will tell. We have seen that the Indian consumer is not very comfortable keeping personal data on a remote server. However, we do feel that this offer may be a good fit for the education sector."

Said RSP Sinha, the CMD of MTNL, "We have nothing to lose, we haven't made any investment. It is Novatium's investment. Rather, we will get almost 25 per cent of the revenue, so there is no loss for us."