GAIL, PowerGrid, RailTel in bandwidth pact

GAIL (India) Ltd, PowerGrid Corporation Ltd and RailTel today entered into a strategic alliance to share bandwidth infrastructure. The three companies together will have the second largest bandwidth capacity after Bharat Sanchar Nigam Ltd (BSNL).

"We expect that the memorandum of understanding between the three public sector units will translate into a meaningful consortium," Prashanto Banerjee, chairman and managing director of GAIL said today.

He added that even though no separate entity was being set up for the purpose of cooperation at present, there was a strong possibility of a joint venture among the three companies in the future.

The consortium expects an eight-fold increase in its revenue from the telecom segment. "We expect that together a revenue target of Rs 1,000 crore can be reached," Mahesh Mangal, director (network planning and marketing) said.

At present, the three public sector undertakings put together earn about Rs 100 crore from this segment. A joint working group will be set up to suggest the mechanism for infrastructure utilisation and business models for division of revenue, and the cost incurred.

The group will have to give recommendations on these issues in three months. "With presence across the country, the consortium aims to target the enterprise segment by providing virtual private network, broadband and managed services," KK Bajpayee, managing director of Railtel said.

The consortium will provide viable alternative to the government for its e-learning and e-governance programmes. In future, the consortium may also enter national and international long-distance.

The combined network of more than 60,000 route kilometre of optical fibre cable of the three public sector undertakings was expected to grow to 75,000 route kilometres in next 2-3 years, a statement said.