Emerging Company: Fast On Tracks

VoicenData Bureau
New Update

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%.

  • 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



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


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