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RailTel Story

The story of RailTel begins around the dawn of the 21st century, when Indian Railways understood the need of having a dedicated agency to take up the creation of modern telecom infrastructure within Railways, concentrating its own focus on Train operations. Such agency was the way ahead to develop capacity and capability within Railways.....

The story of RailTel begins around the dawn of the 21st century, when Indian Railways understood the need of having a dedicated agency to take up the creation of modern telecom infrastructure within Railways, concentrating its own focus on Train operations. Such agency was the way ahead to develop capacity and capability within Railways to take up faster execution of Optical Fibre Cable (OFC) works and related communication projects. From 1983, when it was first decided to introduce OFC in Railways till the year 2000, less than 6000 RKM (incl. WIP) of fibre was laid on the Indian Railways (IR) network.

The formation of the Corporation was also triggered by introduction of National Telecom Policy (NTP) 1999, that brought an opportunity for IR to generate income by leasing huge surplus bandwidth capacity and the related infrastructure. Since Indian Telecom sector was just on the starting of the upward slope of its oncoming growth curve leading to a booming sector, it was considered that sufficient revenue generation will happen for IR as well, through this commercial activity.

Creation of RailTel

In Railway Budget of 2000, announcement was made for formation of a telecom corporation to build a Nation-wide Broadband Multimedia Telecom Network. RailTel was formed as a PSU fully owned by Railways in Sept, 2000 with authorized capital of Rs. 1000 crore with a mandate to modernize Railways Communication network and to significantly contribute to the realization of goals and objectives of the National Telecom Policy 1999. It was also decided that Railway’s existing telecom assets and Right of Way (ROW) shall be transferred to RailTel for commercial exploitation.

RailTel’s initial journey

Post formation of RailTel, Railway’s existing telecom infrastructure, consisting of approx. 6000 RKM of OFC assets were transferred to RailTel for commercial exploitation in addition to the RoW along 63000 RKM of Railway track across the country. RailTel was incorporated as a Schedule-A PSU with an authorised share capital of Rs. 1000 Cr. and was provided a seed capital of only Rs. 15 Cr by the IR. RailTel was allocated the Railways Pink book works of OFC. RailTel had to arrange for its own working capital by way of loan taken from consortium of banks led by State Bank of India and IRFC.

The network inherited from Railways was spread in different parts of the country and didn’t form an integrated network. Hence after its inception, RailTel could not roll out the services to customers outside IR, during the initial years. Considering the demography of the country, it was important for the network to be available across all major States covering top 200-400 cities. RailTel got the IP-2 license (now National Long Distance - NLD) and IP-1 registration in 2002 which enabled it to provide lease line & colocation services in the country. With this RailTel started limited commercial operations from 2002 itself however due to limitations of a small network presence these services had very muted growth despite demand in the market.

RailTel went on to initiate an aggressive roll out of OFC across the country during its initial years along all major Railway routes and created over 25000 RKM of OFC network equipped with SDH based systems by March 2006. Post this RailTel came into a position to offer integrated network services across all major LDCAs (Long distance charging Areas – District equivalent) as defined for Telecom operators for rollout of services within a Telecom circle (State equivalent).

Author Name

Alok Agnihotri

Designation : Dy. General Manager – Corporate Coordination

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