We are embarking on aggressive marketing of our services
24th July 06 , The Hindu Business Line

Santanu Sanyal

"We've appointed four franchisees all over the country to market our services. The network utilisation too has increased substantially." — MR K. K. BAJPEYEE, MANAGING DIRECTOR, RAILTEL CORPORATION

Mr K. K. Bajpeyee, Managing Director, RailTel Corporation

RailTel Corporation of India is perhaps least talked about among the wholly-owned subsidiaries of the Indian Railways. This is perhaps because it is a new organisation, and is working without much fanfare. Slowly but steadily RailTel Corporation has brought about a major change in the country's communication network despite the stiff competition and other challenges. Some of it is already visible. Mr K. K. Bajpeyee, Managing Director of RailTel Corporation, recently discussed with Business Line his organisation's products and services and plans and programmes.

Excerpts from the interview:

RailTel Corporation belongs to the Indian Railways. Isn't it?

Yes. Like Rites, Ircon, IRFC, IRCTC, RailTel Corporation too is a wholly-owned subsidiary of the Indian Railways.

How old is the organisation?

About six years.

How do you rate your organisation's performance over these years?

It is a young organisation, growing, and its performance therefore cannot be judged in terms of financial parameters. Till 2005-06, we suffered a net loss but we hope to break-even in the current fiscal. We have been posting operating profits for the past few years. For example, in 2004-05, the operating profit was Rs 19 crore on a revenue earning of a little more than Rs 32 crore and in 2005-06, the corresponding figures were Rs 33 crore and Rs 62 crore respectively. You, therefore, cannot call it a losing organisation.

There is another point. A communication network company like RailTel is capital intensive in nature, at least in the initial stage, as it needs to invest in infrastructure first. You, therefore, cannot hope to earn profit in the initial years.

What makes you so hopeful of achieving breakeven this year?

We've reasons to believe that revenues from our MPLS-IP (Multi Protocol Label Switching - Internet Protocol) services as well as leased lines will go up. We are embarking upon aggressive marketing of MPLS-VPN (Multi Protocol Label Switching - Virtual Private Network) services and Internet bandwidth. We've appointed four franchisees all over the country to market our services. The network utilisation too has increased substantially.

How dependent are you on the Railways?

We do not get cash support from the Railways but we get other kinds of support — of land, manpower and certain types of infrastructure. The Railways is like a mother organisation.

How then do you meet your funding requirement?

We borrow from banks and right now our borrowing will amount to more than Rs 240 crore.

Your investment plan for the current year...

About Rs 90 crore, mostly to upgrade existing network facilities in Mumbai, Chennai and Hyderabad.

Your priorities...

Serving Railways' communication requirement of course is our first priority. We've considerably improved the Railways' voice and data communication systems in terms of quality as well as reach. Before the formation of RailTel, the total optical fibre cable network of the Railways was 5,000 km, since increased to more than 29,000 km, all along the railway tracks. In the next two years we propose to increase this by another 7,500 km and to 43,000 km by 2010, creating more than 5,000 PoPs (points of presence) across the country. The day is not far off when the entire 60,000 km of the country's railway tracks will be covered by our network. RailTel successfully meets complex and diverse communication requirements of the Railways.

We've been hearing about cyber cafes and ATMs at railway stations. At what stage of implementation are these projects?

We are in the process of providing Internet connection for cyber cafes at 82 railway stations initially, to be increased gradually. Cyber cafes have already been opened at Gorakhpur, Hyderabad and Bangalore.

These are called "Cyber Express". We would like to see that villages and small towns around the railway stations avail themselves of the facilities we provide for Internet browsing, e-mail services, fax and video conferencing. We are also in discussion with content developers to provide information through these cafes. Already, the OFC network covers 2,530 stations, and this is likely to increase in the coming days. As for the ATMs, we can say that our network is in place and it is now for the Railways to decide how to go about it.

Do you serve only the Railways or have other customers as well?

In addition to serving Railways' requirement, it is envisaged that RailTel will create nationwide broadband telecom and multimedia network. We, therefore, have a long list of prominent clients including Tata Teleservices, Hutch Essar, Bharti Infotel, BSNL, VSNL, Idea Cellular, BPL Mobile, Sify, Equant, CDAC, Aircel... We offer bandwidth services, IP services and other basis infrastructure to basic service providers, cellular operators, Internet service providers, multi service operators and corporates.

What about the NLD (National Long Distance) licence you are trying to get?

We've just got the licence. It will now help us offer leased lines to corporates as well as government departments along with other NLD services. We are now in a position to offer these services not only in major cities but also in rural and remote areas.

Don't you face competition ?

The competition in the fields we operate is stiff and it is becoming intense every day. If RailTel had been formed 10/12 years ago, perhaps we would have had an edge over others.

What is your biggest headache?

There are a few but I would rather call them challenges. For example, we do not provide the last-mile connection. It is a weakness, though not insurmountable. Also, the mindset of our people, mostly from the Railways, must change. In a competitive situation we've to be more aggressive to survive in the market.

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