Railtel Plans Cybercafe Network With Sify And VSNL; Hotspots Around Railway Stations; Triple Play?

Public sector enterprises in India like GailTel, the Power Grid Corporation of India and Railtel, that have laid out a fibre optic network for internal communications are now aggressively looking for other means of monetizing them. The GailTel stall at the India Telcom 2006 is quite blunt about it, clearly stating something on those lines of ‘Looking for telecom alliances. Looking for joint ventures.’ While GailTel isn’t yet considering consumer services and Power Grid is testing broadband over power lines for feasibility, Railtel has already launched its consumer services, setting up cybercafe’s in Railway stations. At the India Telecom 2006, I spoke to Shailesh Tiwari, AGM (Business Development & Public Relations) of Railtel Corporation of India, about their plans for commercialization.

Could you tell us about Railtel?
In September 2000, the Ministry of Railways gave the go-ahead for the formation of Railtel Corporation of India, for creating a nationwide infrastructure for fulfilling the communication needs of railways and taking the telecom revolution to the remote parts of the country.
Could you elaborate on your services?
Currently we’re providing commercial services to telcom operators, including Bharti, Tata, Hutch and Aircel. We have 30,000km of fibre network laid out long railway lines, and a 2.5gbps backbone network. We plan to increase that to around 43,000km. We have an excess network capacity of 155mbps to 620mbps. We’re connected to 2700 towns and cities and have a POP every 8-10 km. But this is not IP based.
But you do have cybercafes?
We are offering an IP based service in 40 cities through ethernet interface, offering VPN services to corporates. We also have cybercafe’s and VoIP services. For IP, we’re taking the international bandwidth from VSNL and Bharti.
Could you elaborate on the cybercafe business?
We plan to open cybercafe’s in 82 stations initially. As of now, 14-15 cybercafe’s are operational. VSNL and Sify will be managing the cybercafe’s for us. They’re putting in the computers and doing the maintenance. We’re providing the bandwidth and our network.
And is this on a revenue sharing basis? Could you elaborate on the revenue model?
Yes, it’s on a revenue sharing basis. The deal for revenue-sharing varies from station to station. Right now, on an average, we’re making Rs.40,000 to Rs.50,000 per month per cybercafe.
What are your plans going forward? You don’t have the last mile connectivity, so are ‘broadband to home’ services on the cards…
The last mile in India is still not unbundled, but if that is opened it will revolutionize broadband in India. We’re not considering a wired network because it is not profitable. Eventually we want to create hotspots at more than 500 stations and extend services around the station. We’re looking to tie up with a private enterprise for this. Access to these hotspots can be bought using prepaid vouchers.

Speaking to a few people at the Railtel stall, I also learnt that Railtel is seeking spectrum for enabling Broadband Wireless Access (probably WiMax), and they are considering triple play, which could be launched around the end of 2008. They apparently expect to reach the 82 cybercafe target by around July 2007.