Gail Tel in Rs 750 cr network expansion

Gail Tel, the telecommunication service wing of GAIL (India), on Thursday announced that it would invest about Rs 750 crore for the expansion of its telecom network across the country over a period of five years.

The company will invest Rs 60 crore in the current financial year.

"Our national gas grid and city gas network will enable us to expand our telecom infrastructure at a marginal cost and provide the last mile connectivity," Gail chairman and managing director, Prashanto Banerjee said at a press conference.

"We are in the threshold of a major take-off to create India's most competitive broadband network," he added.

Gail Tel plans to build 7,900 kilometre optic fibre cable (OFC) network along the national gas grid and 20,000 kilometre of OFC network along its city gas in the next five years.

About 3,000 kilometre of OFC network in south India and 400 kilometre of network in Delhi, Mumbai, Pune, Hyderabad, Bangalore and Chennai will be built during the current financial year.

"We will cover 150 cities with our OFC network in the next five years. Out of this 23 cities will be offered last mile fibre to home solution," J K Singh Teotia, General manager, Gail Tel said.

At present, the company has 1,800 kilometre of microwave network and 8,200 kilometre of OFC network. The present network runs through 73 cities.

Gail (India) will try to strike long-term contracts with large bandwidth users and penetrate into new areas. "High volume growth in all customer segments and our services at international benchmark prices will drive our business," Banerjee said.

Gail Tel has an annualised revenue of Rs 19.19 crore from bandwidth sales. The company incurred a massive loss of Rs 17.76 crore in June this year when Videsh Sanchar Nigam Ltd (VSNL) terminated its contract to purchase bandwidth.

The company added Rs 8.32 crore of new business during this year whereas business of about Rs 8 crore is in the final stage of negotiation, Banerjee said.

Gail Tel posted a 75 per cent growth in revenue to Rs 20.51 crore in 2003-04 compared with a revenue of Rs 11.71 crore in the previous financial year.