New Delhi: While Google (Alphabet Inc.) may have hogged headlines in the government’s plans to introduce Wi-Fi connectivity in railway stations, the crucial role of one Indian company has been largely ignored. RailTel Corp. of India Ltd’s optical fiber cable (OFC) network spans more than 45,000 km and is one of the main reasons why this ambitious project to provide internet at 400 railway stations is becoming a reality. In an interview, RailTel managing director R.K. Bahuguna talks about the important projects that the company is handling and how diversification helped it to grow.
What is the role of RailTel in the Wi-Fi connectivity at railway stations project?
The government has an ambitious project of providing Wi-Fi at 400 railway stations and under the initial phase, Wi-Fi has been planned at 100 A1 and A category stations.
Indian Railways, through RailTel, roped in Google as the technology partner for setting the station Wi-Fi. In this tie-up, RailTel is providing high-speed, end-to-end network connectivity on optic fiber and Google is providing the Radio Access Network along with technology support.
It is one of the largest public wifi project in the world as an estimated 10 million people will be using it, once Wi-Fi goes live at all the 100 stations.
The initiative is part of bridging the digital divide and aims to provide high-speed access network to all rail users. The facility can be used for streaming videos, office work or any other use.
By when can we expect the first phase to be completed?
We are planning to complete 100 stations by end of December. At present, work at 19 stations, i.e. 20% of our initial phase target, is already completed. Every week, around 2.5 lakh people are connecting to our Wi-Fi service at railway stations and the number of users is growing by leaps and bounds every day.
The stations where the service is available are Mumbai Central, Bhubaneswar, Raipur, Kachiguda and Vijayawada. Wi-Fi services have been commissioned and soft launch has happened at more than 10 stations, which are Allahabad, Pune, Ranchi, Ernakulum Junction (Kochi), Patna, Guwahati, Visakhapatnam, Jaipur, Bhopal and Ujjain. Work at four stations, Lucknow, Lucknow Jn (NE), Gorakhpur and Sealdah is at an advanced stage. Work on the remaining 300 will be taken up after evaluation of the network at these first 100 stations.
Do you think it is possible to expand the internet to trains?
Our experience is that internet in trains is very expensive. In our pilots, we had provided internet on the New Delhi-Howrah Rajdhani Express and it cost around Rs.6 crore for three coaches.
So, internet in trains will take time and the best way to do it is through satellites. But infotainment is possible, and for that, we are in talks with railways. And if it agrees, we would be ready to provide it.
Then we also have to look at the business model—whether people should be charged for it or not. For us it’s not viable.
Railways minister Suresh Prabhu has been talking about reforms. So are you too on the radar?
Yes, the minister has plans for us too. Although we would be working for railways by helping them in (building) communication networks, but apart from it, another project that we would be assigned is installing security cameras and collecting data for women’s security under the Nirbhaya Fund.
The minister also wanted us to take some other projects like Wi-Fi at railway stations.
Although I can’t share details of project cost, but it costs me around Rs.75 lakh to Rs.1 crore per railway station (to connect with Wi-Fi services).
How was the company’s performance during the last fiscal?
We have done well. Although results are still being worked out, we are expecting 10-15% growth over the last year, which, as per our understanding, is quite good in the industry we are working with. You know we are in the telecom industry, and it is very competitive, and there is hardly any growth. We might cross Rs.600 crore or something like that. Last year it was around Rs.555 crore. We generally have an operating margin of 45%, which is a very good operating margin, and we have a very large portfolio of business.
People generally don’t know us. We were set up in 2000-2001 because the department of telecommunications was not able to deal with Indian Railways’s telecom requirements.
Why did you diversify?
If we would have stuck to the core business for which the company was created, our turnover would have been restricted to Rs.100 crore. We were able to increase it to Rs.600 crore by deciding to diversify.
We created National Knowledge Network along with BSNL (Bharat Sanchar Nigam Ltd) and Powergrid where we connected all research and development institutions like IITs, IIMs and other research organizations. The Rs.5,590-crore project is one big chunk of business with us as it is a long-term commitment till 2019. This is just one of the examples of how opportunities came and we diversified.
Which are the other major projects you are doing?
One of the major projects we are doing is connecting the North-East district and blocks, where there is no connectivity using fibre network. We have completed Tripura already, and in other states, we have made some good progress. There are a lot of local challenges which we are facing: the terrain is difficult, availability of labour is not there, workforce is not very proficient, roads are narrow and weather conditions, etc.
And despite that, we have completed 50% of the National Optical Fibre Network Project, under which the prime minister wants to connect 2.5 lakh gram panchayats by the end of 2016. The project deadline is staggering, and it’s unlikely to be completed this year. We have taken a conscious call to connect reas with more population first under the NOF project.
(In) Nagaland, we have done good—around 50%; in Meghalaya, we have good progress. Apart from it, we are also doing NOF work in Gujarat.