GAIL, PowerGrid, RailTel join hands for telecom operations
28 Oct.2005, The Hindu Business Line, New Delhi

BROADBAND TIE-UP: Mr Proshanto Banerjee, Chairman and Managing Director, GAIL (India),
flanked by Mr R.P. Singh (right), CMD, Power Grid Corporation, and Mr K.K. Bajpayee, MD, RailTel Corporation of India Ltd,
after signing a MoU in the Capital on Friday. — Kamal Narang

STATE-owned GAIL (India) Ltd, Power Grid Corporation of India Ltd and RailTel have announced plans to synergise their telecom operations by pooling in their telecom infrastructure to become the country's second largest broadband service provider, with plans to venture into STD and ISD services in the future.

The three companies have signed a memorandum of understanding to form a consortium for jointly offering bandwidth for e-entertainment, e-education and e-medicine.

While gas major GAIL owns around 13,000 km of optic fibre cable network, Power Grid Corp has laid around 19,000 km of cables linking 60 major cities. RailTel has networked 2,200 towns with a 27,500-km cable network.

The consortium, which will provide connectivity to Jammu and Kashmir and the north-eastern States, will be second only to Bharat Sanchar Nigam Ltd's 400,000-km network.

"We are coming together to offer reliable, quality and affordable services," the Power Grid Chairman and Managing Director, Mr R.P. Singh, said at the MoU signing ceremony. The consortium, which will co-ordinate marketing and future OFC development plans to get a pan-India footprint, will primarily focus on the entertainment sector and is targeting Rs 1,000 crore revenue from the business by 2008.

"Perhaps we can get into national and international long distance (telephony) at some stage," the Indian Railway's telecom arm RailTel's Managing Director Mr K.K. Bajpayee, said.

The GAIL Chairman and Managing Director, Mr Proshanto Banerjee, said the consortium would take shape over the next three months and a viable business model will be worked out on the basis of revenue sharing. The consortium aims to target the enterprise segment by providing a virtual private network, broadband and managed services. The integrated network of the three companies will be ramped up to a 75,000-route km in two to three years.

The total broadband business in the country is projected to be about Rs 9,000 crore, and the consortium is looking to get at least 10 per cent or about Rs 1,000 crore in three to four years, Mr Bajpayee said.

At present, RailTel earns revenues of about Rs 65 crore from its telecom venture, while Power Grid and GAILTEL — the telecom arm of GAIL (India) — earn about Rs 25 crore each.

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