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Building Blocks: Telecom upgrade by mining and construction firms

March 31, 2011

The mining and construction industries are key contributors to the Indian economy. In recent years, both sectors have been experiencing sustained growth and, in turn, have been enhancing the country’s GDP. Of course, the global downturn led to a slowdown in these sectors, however, the last quarter of 2009 saw signs of recovery in both industries.

India produces as many as 86 minerals – 4 fuels, 10 metallic, 46 non-metallic, 3 atomic and 23 minor minerals (including building and other materials). In 2009-10, the total production of metallic minerals was about 246 mt, almost a 3 per cent increase over 2008-09. On the other hand, the total production of non-metallic minerals during 2009-10 was 247.94 mt, a growth of 10 per cent over the previous year.

The total value of mineral production in 2009-10 was Rs 1,279.21 billion, an increase of 4.6 per cent over the previous year. Of this, fuel minerals accounted for almost 62 per cent, metallic minerals for 22 per cent and non-metallic minerals (including minor minerals) for about 16 per cent.

Mining activity in India continues to be dominated by the public sector, with Coal India Limited (CIL) being the largest player. Over the years, some private players such as Hindalco Industries Limited and Sterlite Industries Limited have also contributed significantly towards mining. The production of coal and lignite is dominated by CIL and the Neyveli Lignite Corporation (NLC) respectively. Hindalco is the biggest producer of aluminium in India while National Aluminium Company Limited (Nalco) is the second biggest. The biggest producer of iron ore in the country is the National Mineral Development Corporation (NMDC) with a capacity of almost 35 million tonnes per annum (mtpa) of iron ore. A major part of the production also comes in from captive mines that have been allotted to steel producers such as Tata Steel and Steel Authority of India Limited (SAIL) – in the public and private sectors.

Lead and zinc production is dominated by Hindustan Zinc Limited (HZL), while the biggest producer of copper is Sterlite Industries Limited, accounting for almost 49 per cent of the production. However, notably, Hindustan Copper Limited (HCL) is the only vertically integrated manufacturer of primary copper in India.

The construction sector has also been making progress. According to the Reserve Bank of India, between 2005-06 and 2009-10, the construction industry’s turnover grew at a rate of 9 per cent to 12 per cent. The construction industry is the second largest employer (after agriculture) in the country, employing about 33 million people. In addition to providing employment, the sector creates significant opportunities in ancillary industries such as construction equipment and materials.

The biggest driver for construction is the infrastructure sector. Investments in the Twelfth Plan are expected to be roughly double the investments made in the Eleventh Plan. During the Twelfth Plan, the estimated investment in infrastructure is expected to increase to Rs 40,992.4 billion. This huge investment in infrastructure, coupled with recovery in the residential segment of the real estate market, is expected to drive the construction industry during the period 2011-17.

The major players in this segment are the Hindustan Construction Company, Larsen & Toubro, Punj Lloyd, Nagarjuna Construction Company, IVRCL Projects and Infrastructure, Gammon India, Jaiprakash Associates and Simplex Infrastructures Limited (SIL).

Owing to the large scale of projects undertaken and the widespread network of offices and worksites, companies in the mining and construction space are demanding better quality services, which includes top-of-the-line telecom facilities. Thus, establishing a secure and flexible communications infrastructure is at the top of most construction and mining majors’ agenda, especially as today’s competitive environment has ensured that technology plays a far greater role than it did before.

In the initial days, such companies utilised basic local area networks and computers were used primarily for email. More often than not, each branch office  would operate independently, thereby creating islands of information. This required a large number of IT personnel to maintain the computers and applications deployed at various sites, adding to the cost and complexity of operations.

Today, telecom has permeated every level of functioning and companies in these sectors are moving towards fully converged networks. In fact, the entire gamut of functions – from project design and development to implementation and monitoring – has been automated.

To this end, communication mediums such as leased lines, VSATs, MPLS and even satellite-based communication are making their presence felt. For example, Sitendu Dash, senior manager, systems, HCL, says, “Our 4 Mbps MPLS connectivity, sourced from Reliance Communications (RCOM), provides us with increased quality of service, easy and cost-effective network expansion, flexible bandwidth allocation, network security and assured network redundancy.”

Similarly, VSATs are being used in a big way. VSATs help in remote connectivity, providing tools such as email, internet access, voicemail, videoconferencing and real-time video inspection. For example, Singareni Collieries Company Limited’s (SCCL) coal dispatch points have VSAT connectivity to ensure business continuity.

Also, DLC (NLD) is a popular medium for interbranch connectivity. For connecting to the internet, companies in this space mostly use DSL, optic fibre and Wi-Fi networks. To access applications such as email, corporate intranet, etc. on the go, they are increasingly equipping their mobile workforce with BlackBerry smartphones, so as to enhance efficiency and streamline flow of information from the field to the head office.

Besides telecom tools, IT applications such as enterprise resource planning (ERP) have also become popular. ERP systems help automate and link all processes and combine data from separate applications, thereby synchronising the flow of data and information across systems.

All in all, the usage of telecommunications and IT in the mining and construction segment has come a long way, from isolated, stand-alone systems to more converged, robust networks.

tele.net conducted a survey of 10 mining and construction companies to assess their telecom requirements and solutions. The respondents were asked about their telecom set up, main concerns regarding the telecom services being provided and the kinds of applications being utilised.

The following questions were asked in the survey:

•    What are the organisation’s key technology requirements?

•   What mix of service providers and vendors is used for various services?

•   What are the key issues and concerns with respect to telecom infrastructure and services?

•  What are some of the enterprise and mobility applications that the organisaton has implemented?

•   What kinds of redundancies have been built into the organisation’s network?

•   Which network security tools have been implemented by the organisation?

•  What are some of the new applications that the organisation is looking to implement in the near future?

Key technology requirements 

The results of the survey suggest that establishing a robust communications backbone with minimum latency and zero downtime is a prerequisite for most mining and construction majors. Also, connectivity is a priority as such companies require their central office to be networked with several worksites in order to supervise the project from the central offices in real time, along with the added capability of running several applications such as voice and video in real time.

To achieve this, most players in this space have opted for multiple wide area network (WAN) and last mile access technologies. In the mining vertical, leased lines and MPLS are the most widely utilised for WAN connectivity. For example, HCL uses a 4 Mbps MPLS link as well as an 8 Mbps internet leased line link. To connect to remote locations, the MPLS link has 2 Mbps bandwidth. Both connectivity mediums have been sourced from RCOM.

Players in the construction space utilise DLC (local loop) technology as a primary WAN technology and DLC (NLD) for interbranch connectivity. Also, ISDN is used for videoconferencing while VSAT connectivity is used for connecting construction sites in remote regions to the company headquarters. IPLC is being used for international connectivity along with other popular technologies such as Ethernet, IP-VPNs and MPLS.

Some of the respondents in the construction space have also set up data centres. According to Jaya Bhattacharyya, general manager, IT and MIS at SIL, the company set up its data centre using the latest technology, sourced from companies like IBM, Dell, Cisco and Oracle.

For last mile connectivity in mining companies, optic fibre, DSL, Wi-Fi and radio frequency are popular mediums. This is primarily owing to the high bandwidth requirements for applications such as videoconferencing. These companies have also set up Wi-Fi connectivity in their main office and branch locations and placed radio links to back up their optic fibre last mile access. For example, SCCL uses optic fibre cables and wireless technologies for last mile connectivity. According to Geeta Mohan, deputy general manager, IT, this technology combination proved to be the most cost effective besides accommodating the heterogeneous nature of the network.

For players in the construction space, DSL, optic fibre and wireless technologies (Wi-Fi and data cards) are the popular last mile connectivity mediums. At Mahagun India Private Limited (MIPL), DSL is used for last mile connectivity, in conjunction with Wi-Fi. A “distributed” set up is used, which means that internet connectivity comes from a central point and is then broken down or channelised by several points on its premises. Wi-Fi has also helped the company create several secure hotspots within the premises. Apart from standard telecom tools, software applications are also widely used. The most popular software application in mining companies is ERP.

In the construction sector, all the companies surveyed utilise software applications such as ERP, customer relationship management (CRM), supply chain management (SLM), business intelligence and inventory management.

Of these, ERP and CRM are being extensively used, followed by inventory management systems, SCM and business intelligence. SIL, for example, launched project E-Construct – an ERP application that functioned as an integrated construction project management software.

Service providers and vendors 

The survey findings indicate that mining companies usually opt for a mix of service providers and vendors. The most popular of these are Bharat Sanchar Nigam Limited (BSNL), RCOM, Tata Communications, Bharti airtel, Tata Teleservices Limited (TTSL), Mahanagar Telephone Nigam Limited (MTNL), Ericsson, Alcatel-Lucent, Wipro, Primus, Cisco, IBM, Spectranet, Nortel and Hewlett-Packard. Construction companies use the services of Bharti airtel, BSNL, Tata Communications, Sify, Tulip and TTSL.

Issues and concerns 

The integration of communications infrastructure, bandwidth availability and customisation of software are the main concerns faced by mining companies.

Elaborating on this, Sitendu Dash, senior manager, systems, HCL, says, “Bandwidth availability is a major issue for us. We have to ensure adequate bandwidth at each of our locations in order to keep an eye on project implementation and monitoring in real time. This is especially difficult in remote areas.”

Nimai C. Sahoo, deputy general manager, systems at Nalco, believes that the lack of new technologies in the organisation is an issue. He says, “Certain advanced facilities like call forwarding, voicemail, teleconferencing, etc. are currently not available in the organisation, which could really add value to the communications infrastructure. Moreover, IP telephony can also provide a significant breakthrough for effortless communication across the enterprise’s data network.”

While construction companies face similar issues, connectivity to remote areas, familiarising employees with the latest technologies and security of the communications network were their major concerns.

For example, the respondent from SIL says, “Connecting remote project sites to our data centre and providing on-time support to resolve all technology-related issues is quite a hurdle. Training our employees to use new technologies is a challenge.”

Companies like SCCL are not fully satisfied with the performance of their operator. Says Mohan, “Establishing a huge network was a very challenging task, owing to the location of certain company units such as forest areas. Not many service providers have an infrastructure set up in such areas. Proper wireless signals are not available as the line of sight is not present due to overburden dumps created as a result of mining activity.”

Mobile and enterprise applications 

A host of enterprise and mobility applications are being used by both verticals. The survey showed that in the majority of the respondents’ offices, employees utilise instant messaging to communicate with each other; toll-free services for customer care are also used.

Enterprise mobile applications are used quite extensively by these players. Mobile email and mobile data connectivity are the most popular applications, while mobile conferencing is also gaining traction as is respondents accessing the corporate intranet from their mobiles. In these companies, employees are on the move for a significant period of time, going from one site to another.

To help employees stay connected while on the go, SCCL uses a secured VPN to connect to the company’s network. Video-conferencing facility is provided at three places in the company, while web-based videoconferencing from desktops is also being used. Other popular applications include push alerts and personal information management systems.

Network security 

A secure network has become a top  priority for companies. Therefore, in most cases, a multi-tiered infrastructure is used. For mining companies, firewalls are the most preferred network security applications, followed by OS security patches and proxy servers. HCL uses Nortel IPS/IDS, firewalls, Chekpoint software, and CA and TrendMicro’s antivirus and antispam tools for their mail servers, besides various software applications to secure their network.

The majority of the construction companies have deployed a portfolio of network security solutions that includes firewalls, proxy servers, unified threat management systems, access logs, etc. Of these, only firewalls are being extensively utilised. Mahagun India uses firewalls provided by Juniper Networks and various other software like antivirus packages.

Redundancy options 

For back-up, the mining companies utilise a mix of telecom infrastructure such as leased lines, ISDN lines, UPS and data back-up, and applications such as data archiving and data recovery.

Nalco utilises a central UPS back-up that is connected to all personal computers on the premises. The UPS comes on immediately in case of power failure. In addition, it relies on data back-up provided by IBM. Says Sahoo, “IBM’s tape library allows us to store and archive important data and information on tapes, which are then stored to be used whenever required.”

The back-up infrastructure used by construction companies usually comprises a centralised UPS system that is connected to every computer on the LAN and comes on automatically in case of power failure. It also includes Veritas tape drives that help to store data, information and voice-based correspondence permanently; an ISBN (integrated digital service network); dual homed ports, a dual-VSAT set up; service provider diversity; and mirror servers.

The road ahead 

Most of the companies have drawn up plans about the technology and products they are likely to deploy in the near future.

Sahoo from Nalco says, “Video surveillance will come up in a big way. Videoconferencing activity will gain popularity and will become a significant tool in day-to-day working. There will be a move towards adoption of unified communications technologies. Teleconferencing will be adopted on the data network. We will also take a few cautious steps in using wireless solutions.”

SIL too, has chalked out a multifold plan with regard to is communications infrastructure. This includes developing E-Construct as a product to meet the requirements of the construction industry, executing telecom-related jobs in core contracts, enhancing the company’s knowledge management skills and developing the company’s technology division as an independent profit centre. 

SCCL, on the other hand, prefers to improve its existing infrastructure before opting for any new technology. Says Mohan, “We plan to provide redundancy in all the functional units, improve connectivity at the unit level and improve network security in the next phase.”


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