Interview | COVID-19 pandemic has opened up new growth opportunities for us: RailTel#39;s Puneet Chawla


In an exclusive interview with Moneycontrol, Puneet Chawla, Chairman and Managing Director of Railtel, said the company was looking aggressively on diversifying into sectors like village Wi-Fi, health and education.

Puneet Chawla, Chairman and Managing Director of RailTel.

Puneet Chawla, Chairman and Managing Director of RailTel.

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The initial public offering (IPO) of RailTel Corporation, a subsidiary of the Indian Railways, is seeing a positive response from the market. The anchor investor portion has been fully subscribed and the retail portion has been oversubscribed 4.99 times on the first day itself.

In an exclusive interview with Moneycontrol, Puneet Chawla, Chairman and Managing Director of Railtel, said the company is looking aggressively on diversifying into sectors like village Wi-Fi, health and education.

He added that its revenue from the private sector is expected to grow in the near future. Edited excerpts:

Q. What will be the major changes that RailTel will see after the IPO?

A. The response from the market has been excellent. If you see the anchor investors portion also, it was fully subscribed. Finally, also, there have been five foreign portfolio investors, who are given allotments, six leading mutual funds, two insurance companies and one alternative investment fund. As far as the retail customers are concerned, it was oversubscribed by five times on the first day itself. It was fully subscribed in the first hour itself. All this is due to the unique positioning of the company.

Now, we have to keep the confidence of the investors high. We have to ensure that we achieve the targets for growth at a fast pace. RailTel saw a growth of 15 percent during the first six months of the current financial year. In the third quarter, the performance was much better. COVID-19 has positively impacted our growth. If you see the last nine months, RailWire customers have grown 2.55 times as compared to April 2020. Our videoconferencing services too increased. COVID-19 has opened up new growth opportunities in the IT and ICT (Information Communication Technology) sector.

Q. Station Wi-Fi is one of your key focus areas. Have you set any targets in this business?

A. We have already connected 5,900+ stations to the WI-FI network. All these stations have got broadband PoPs or broadband hubs. From these hubs, we can extend services to other locations also. We are going to use this infrastructure to expand our broadband business, which is done under the brand name of RailWire.

We can provide these services to nearby villages for digital inclusion. The government plans to provide broadband to 6 lakh villages in 1,000 days. We are very well positioned for that because 80 percent of these stations that are under Wi-Fi network are in rural areas. We have already submitted a proposal to the department of telecommunications for Jharkhand and Maharashtra. If they ask, we will submit such proposals for other states also. We have got big plans to take forward the infrastructure that we have already created.

RailTel has also lined up plans to monetise this too through content on demand. Through this, people at railway stations and the trains will be able to access infotainment and entertainment content on their devices. We have already appointed a partner for this and they will be sharing revenue with us. In a number of stations, we have also rolled out the paid Wi-Fi plan so that users can achieve higher internet speed with a minimal payment.

Q. You mentioned about expanding to the villages. Will you be tying up with private players for this?

A. The government has announced PM WANI programme, through which a person registered in one Wi-Fi network can seamlessly go to the other. Our company has one of the largest public Wi-Fi networks in the world. We see ourselves as leaders in this space. All these are going to have a positive impact on the finances and also on the reach of the company. Now, we will penetrate further deep.

As far as tying up with private players is concerned, we already have RailWire broadband model in which the technology part is kept with ourselves. We appoint a managed service provider for each state. For the last-mile connectivity, we partner with access network providers. Then the revenue is shared. The benefit of this will be that we will be making the local entrepreneurs our partners.

We will also create some applications in sectors like agriculture, horticulture and fisheries, which village population can use for income generation too.

Q. What are your diversification plans?

A. We have already started diversifying, as I said we have already diversified into villages. We are looking aggressively at the education and health sectors. We are already working with the railways for implementing a hospital management information system. Proposals were given to both state and Central governments for connectivity and smart classes in schools. We have started participating in smart city tenders. These are new focus areas.

Q. You had recently approached the government for the allocation of 5 megahertz spectrum in 700 MHz band. What will be its advantages?

A. With the allocation of this spectrum, a high-speed mobile communication network will come across the railways track all over the country. This will meet the safety requirements of the railways. It will help in the operations in a big way and the public in a limited way. It will be helpful in the signalling revamp (ETCS) and the train collision avoidance system. It will be the backbone of this system.

Q. Are you over-dependent on the government sector?

A. We are not heavily dependent on the government sector. Around 30 percent of our revenue is from the Railways and 30 percent is from other government sectors. Remaining 40 percent is from the private sector. We are partners with the Indian Railways in its digitalisation journey. A number of companies, including fortune 500 companies in the private sector, are our clients, we cannot give their names as we have signed non-disclosure agreement with them. They prefer our network because it is a secured network and we provides better Service Level Agreement. Going ahead, the proportion from the private sector may increase.