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RailTel has shown a quantum rise since its establishment on September 26, 2000. It was set up with an objective to optimally utilize Railways' communication assets commercially. RailTel is working towards augmenting and modernizing the existing infrastructure of railways to provide communication services to railways and earn profit commercially. It has laid 29,000 Rkm of optical fiber. Out of this around 25,000 Rkm is lit. And the company has sanction for another about 6,000 Rkm. It aims to reach 35,000 Rkm in a year and a half. The target for 2008 is 42,000 Rkm. The company invested around Rs 800 crore including Indian Railways investment, in its network in FY 2005-06.

In FY 2005-06, RailTel netted a total revenue of Rs 88 crore, a 35% growth from FY 2004-05. The company has sold 2,464 E1s in FY 2005-06, a 100% growth excluding the usage by Indian Railways, which is another 20%.

Highlights

Got letter of intent for NLD license 100% growth in sale of E1s in FY 2005-06 MoU with GAIL and PowerGrid to form a consortium

RailTel provides bandwidth services at various levels and over secure OFC path, which it is deploying all over the country. Along with selling pure bandwidth, RailTel is also providing Internet services as an ISP and has an ISP category-A license. The company aims to provide Internet services along its network to corporates and individuals. The network supports VoIP as well as video chat and the organization expects to launch feature-packed cyber cafes at 82 railway stations under the name of 'Cyber Express' in 2006-07.

 The company is also a great proponent of infrastructure sharing and provides co-location services.

RailTel is capable of providing MPLS based virtual private networks for corporates. It is also a few steps away from entering the NLD business as a carrier of carriers. It has already got a letter of intent from DoT and its IP-II license is being converted to NLD.

In 2005, the company established a 2.5 GbPS STM 16 link between New Delhi and Itarasi using next generation SDH systems. This will give RailTel an edge over its competitors in offering leased lines and IP services.

The company is also deploying wireless broadband solutions to provide broadband voice and data services to towns and cities along its railway routes in India. It carried out its infrastructure projects with companies such as Alcatel, Puncom, and Juniper.

It has also tied up with Motorola for distributing radio equipment in the northern and eastern parts of India. UTStarcom is supplying its optical transport solutions to RailTel.

In 2005, RailTel also signed a MoU with two other PSUs, GAIL and Power Grid to enhance their telecom operations by forming a consortium to jointly offer bandwidth. With this they will become the second largest broadband service provider in the country.

The consortium is expected to be responsible for coordinating marketing and future OFC development plans to establish a pan-India presence. It plans to focus on entertainment sector and is targeting Rs 10 bn revenues from the business by 2008.

Besides this, consortium also plans to have an extensive intra-city OFC network in more than 60 important cities to provide end-to-end services.

Despite all the enthusiasm, its still a long way for the consortium to materialize as many aspects of the deal are still being worked upon. The partnership is developing, but the companies are not yet in the consortium stage. 

In 2006-07 the company is sure to make profits. It also plans to provide DWDN on some of the busy areas and to invest around Rs 120 crore to make the networks efficient in certain areas. It plans to expand in a big way as an ISP. RailTel's strength is the Railway's network and has 2,500 Points of Presence (P-O-P's) and it has immense potential, as the rural communications will expand.

The groundwork has been done and RailTel is ready to make its mark in the telecom industry. With the mammoth strength of Railways under its belt it is bound to emerge as a winner.

Sonia Sharma
sonias@cybermedia.co.in