RailTel to get fresh lease of life with Sam Pitroda tech panel

The late-starter and long forgotten, the RailTel Corporation may get a fresh lease of life under the railway minister Mamata Banerjee. In a move to give a fresh orientation to this arm of the railways in these times of telecom revolution, which was born in 2000, the railway minister announced constitution of a fresh committee under technology expert, Sam Pitroda to suggest innovative methods to utilise the optic fibre network the railways have.

Pitroda was the one who started the first step towards the telecom revolution in the country when the late Rajiv Gandhi was the prime minister. Obviously Banerjee has pinned hopes that he would be able to breathe fresh life in RailTel.

The railways have extensive network of optic fibre cable across the country (it currently has over 32,500 km of OFC network and work on an additional 10,000 km is under progress), which runs parallel to the rail network. It has a telecom network and operations of its own.

The RailTel Corporation had projected earnings of Rs 500 crore through leasing of its optic fibre cables to telecom operators way back in 2000 but till date is far from reaching that figure. The corporation posted dismal profits of Rs 40 crore last year on a total revenue of Rs 213.9 crore.

What has pulled RaiTel Corporation back in a sector like telecom, which is booming is that it started late and rather laggardly. By the time it got into selling bandwidth to private telecom operators there was surplus of it as several players had set up OFC network of their own. Secondly, they are still confined to remaining just the 'carrier of carriers' or 'data coolie' rather than getting into carrying content on its own.

Among the new options that the corporation could now look forward to is becoming a carrier service for operators for data.

Especially, given the spectrum crunch, the corporation could use its OFC to carry data for the service providers, while they continue to use spectrum for voice only. Secondly, the corporation could also use the opportunity of entering the virtual calling card where a user may purchase a coupon worth a particular denomination and use it for making calls through his phone for the specified airtime.

The virtual calling card offers them an opportunity to get into the long distance business by servicing the end-consumer. However, the beginning has to be made fast as the market is so competitive that delays leads to overcrowding and lower yields and volumes. Further, the telephony business of the railways needs branding to promote itself in the fiercely competitive telecom arena.