One of the oldest free e-mail services Hotmail.com, Portal Yahoo.com, search engine Altavista.com, online technology news magazine Cnet.com and popular shareware site Tucows.com are among the sites which are to be co-located. Yahoo.com, Altavista.com and Cnet.com have been rated as the third, fourth and fifth most popular websites respectively on the internet by Hot100.com which lists the top 100 sites based on the number of hits each site gets.

The deal will help VSNL to save expensive bandwidth to the United States where most of these servers are located. Overseas bandwidth is also a major component of the cost at which VSNL leases capacity to other Internet service providers (ISP). According to a source, VSNL will save around 10 MB or Rs 41 million at peak time byco-locating these sites here.

The arrangement will also benefit the five sites because of a corresponding decrease in load on their servers and bandwidth. For instance, of the 24 million hotmail users worldwide, nearly half a million are estimated to be from India. VSNL would provide the bandwidth and premises for housing the servers, under the terms normally governing such agreements. In return, it would get free advertising space on these sites. "We can also bargain for a percentage of advertising revenues from the site ... there are no fixed rules governing what the percentage should be," said the source.

The first deal is expected to work out in three to four weeks with Tucows.com. The site features software for Windows OS, Linux, and the Macintosh platform among others. The software can be downloaded and used for free for a limited period of time. The site is already being hosted in the Middle East, Africa, Australia, Canada, Caribbean, Mexico, Europe, United States to enable faster downloads forpeople in these regions.

VSNL has just concluded a similar deal with Cricket.org, the third most popular sports site in the world. At the recent relaunch of its services it also announced it was co-locating the browser downloads from netscape.com and Microsoft.com.