Sanjai Kumar, chairman and managing director, RailTel
RailTel has been reporting consistent operational and financial growth, driven by the rapid expansion of digital services in the country. The company is also entering into key partnerships to diversify its operations while exploring opportunities in the ever-expanding data centre and cloud domains. In an interview with tele.net, Sanjai Kumar, chairman and managing director, RailTel, talks about the company’s recent performance and growth strategies…
What have been the key operational and financial highlights of RailTel’s performance during the past year?
RailTel has demonstrated exceptional performance, achieving consistent growth in operational revenue and generating healthy profits. In financial year 2022-23, the company recorded its highest-ever operating income of Rs 19.64 billion, reflecting a remarkable annual growth rate of 27 per cent compared to the corresponding figure of Rs 15.48 billion in the previous year.
In terms of profitability, RailTel posted a total profit before exceptional items and tax of Rs 2.57 billion for the financial year 2022-23, surpassing the Rs 2.31 billion achieved in the previous financial year. With a strong focus on project execution, the company anticipates significant growth in operating income in the upcoming quarters.
Furthermore, RailTel maintains a robust order book valued at over Rs 45 billion. This is expected to translate into revenue steadily and gradually over the forthcoming quarters.
What has been the progress under RailTel’s initiatives in the public Wi-Fi space? What are your future plans in this regard?
RailTel has established one of the world’s largest integrated Wi-Fi networks across 6,108 railway stations, with more than 5,000 of these stations located in rural areas. This extensive network has transformed railway stations into hubs of digital inclusion, providing Wi-Fi access to over 1.8 million users daily through the captive portal.
By leveraging these Points of Presence (PoP), RailTel is expanding the broadband network to cover approximately 100,000 villages within a 5 km radius of railway stations. This initiative is a significant stride towards bridging the digital divide, as the lack of infrastructure often discourages other service providers from offering high-speed internet connectivity in these remote villages.
Looking at the future, our goal is to monetise the station Wi-Fi network. To achieve this, we have partnered with a consortium led by 3i-Infotech. This collaboration will enable us to generate revenue by capitalising on the Wi-Fi footfall through targeted advertisements and multimedia infotainment services for railway passengers.
What are the key partnerships that RailTel has entered into recently? What are the key highlights of these projects?
We strongly believe in the power of collaboration and its significance in maintaining a competitive edge. In addition to our partnership with the consortium led by 3i-Infotech to monetise the Wi-Fi network at stations, we have established several collaborations with a number of companies/ establishments.
One notable collaboration is with M/s CloudExtel, a reputable full-stack Network-as-a-Service provider. Together, we launched India’s first neutral shared radio access network solution for congested locations, aiming to enhance the overall telecom user experience.
Furthermore, RailTel has signed an MoU with Deenbandhu Chhotu Ram University of Science and Technology, located in Murthal, Sonipat, Haryana. This collaboration is focused on offering various information and communication technology (ICT) and telecom services.
RailTel has also established a tripartite partnership/MoU with the National Informatics Centre (NIC) and NICSI. This collaboration allows for the provision of comprehensive managed end-to-end e-office (via NIC) and SPARROW services to user organisations.
Recently, RailTel has also been empanelled by the Centre for Development of Advanced Computing (C-DAC) to provide marketing consultancy services in various domains, including HPC, grid and cloud computing, software solutions (including smart cities), health informatics, and cybersecurity and cyber forensics.
“RailTel has established one of the world’s largest integrated Wi-Fi networks across 6,108 railway stations, with more than 5,000 of these stations located in rural areas.”
How does RailTel plan to leverage opportunities in the growing data centre and cloud market in India? Are there any other projects in the pipeline?
With the rapid growth of the digital economy and digital transformation worldwide, there is an increasing demand for expanded data storage facilities, leading to an unprecedented boom in the number of data centres and cloud storage centres.
RailTel, as you may know, proudly operates two UPTIME USA-certified Tier III data centres located in Gurugram and Secunderabad. Through these state-of-the-art facilities, RailTel offers a comprehensive range of data centre services. We take pride in being among the few government organisations with the Ministry of Electronics and Information Technology-empanelled cloud services. We also have an in-house specialised Security Operation Centre (SoC) and hold an internet service provider licence. Our focus remains on expanding the capacity of our data centres and cloud infrastructure through capital expenditure investments. Currently, we provide data centre-related services to numerous clients.
Recently, RailTel achieved the esteemed Payment Card Industry Data Security Standard (PCI DSS) certification for its data centres. This accomplishment reaffirms RailTel’s unwavering commitment to maintaining a secure environment for our customers’ sensitive data. The PCI DSS certification further enables our data centres to host applications related to the banking, financial services, and insurance sector.
RailTel is actively working on establishing another data centre in Noida and deploying edge data centres at 102 locations within railway premises/land, specifically targeting Tier-II and Tier-III cities. These initiatives are being pursued in collaboration with industry partners under a public-private partnership (PPP) model.
Additionally, RailTel is implementing a project in collaboration with C-DAC to develop IT infrastructure for greenfield data centres in New Delhi and Bengaluru. This endeavour aims to enhance C-DAC’s capacity to secure big data enterprise applications.
How is RailTel’s retail broadband service progressing? What are the new initiatives in this space?
Our retail broadband service, RailWire, continues to thrive in the market. It has garnered popularity due to its unwavering reliability and affordable tariffs. To further expand the reach of our services, we are actively entering into MoUs with various state power transmission companies, allowing us to utilise their optical fibre cable network.
In addition to our core offerings, we have introduced a range of new value-added services to enhance the customer experience. These include bundled over-the-top content plans, the provision of RailWire fibre-to-the-home subscriptions on RailTel’s Wi-Fi network at railway stations, and internet protocol television services. Despite the highly competitive nature and low barriers of this market, we remain committed to continuously adding more value-added services and expanding our presence in Tier-II and Tier-III areas.
Our primary focus is on increasing the number of RailWire subscribers. The subscriber base has already grown to more than 520,000 across the country, with more than 45 per cent of these subscribers located in rural areas. This highlights RailTel’s strong dedication to promoting internet penetration in villages. Our future goal is to further grow the subscriber base exponentially, solidifying our commitment to providing quality broadband services to a broader customer base.
Going forward, what are the new growth avenues and revenue opportunities that you plan to explore?
We maintain a strong focus on the future growth vision, continuously adapting to the evolving IT and telecom landscape and reorienting strategies to meet emerging challenges. To achieve our goal of becoming the preferred telecom solutions and service provider for the knowledge economy, we have outlined a three-pronged strategy. This strategy involves optimising our product and service offerings, expanding our network infrastructure and upgrading to a high-capacity network.
A key aspect of RailTel’s plan is to provide value-added services through partnership models, leveraging RailTel’s existing network and cloud capabilities, particularly for the enterprise segment. The company intends to establish a new data centre in Noida under a PPP and deploy 102 Edge data centres through a revenue-sharing approach. With the world going digital, the cybersecurity threats are also looming larger. Our SoC at Gurugram provides onsite and offsite cybersecurity, which can be a good revenue stream for us in the future.
We recognise our extensive network as a key differentiator in the market, making it a valuable proposition for delivering services to customers. Therefore, we plan to invest in upgrading our backbone network, central network operation centre and access network; and increasing our network capacity from 100G to 800G at prominent locations. This will involve procuring routers, power plants, chargers and state-of-the-art equipment.
With the advent of 5G services, the industry will experience a rapid shift in service delivery and operating models, driven by the adoption of emerging technologies such as the internet of things (IoT), artificial intelligence/machine learning (AI/ML), augmented reality/virtual reality and service convergence. Building digital trust and taking robust cybersecurity measures are crucial in this changing landscape. RailTel has strategically decided to enhance its capabilities to cater to this market, recognising the vast opportunities in the field of cybersecurity. A robust cyber framework and strong data governance will enable RailTel to build digital trust and deliver customer-centric services.
We will also prioritise evolving as an implementation partner in various fields of the IT/ICT sectors such as smart cities, e-governance, cybersecurity, and IoT/AI/ML-based application projects initiated by the central and state governments. Additionally, we will refocus on railway projects such as signalling, LTE-R, Kavach, station modernisation and consultancy, leveraging our expertise in these domains.
