Puneet Chawla, Chairman & MD, RailTel Corporation Ltd.

The organisation has been profitable since FY 2007 and in Fiscal 2020, the organisation has reported the highest net profit margin amongst key telecom companies.

Feb 16, 2021 10:02 IST India Infoline News Service

In an interaction with Shweta Papriwal, Editor, indiainfoline.com Puneet Chawla, Chairman & MD, RailTel Corporation Ltd. said, "RailTel has undertaken the responsibility to transform Railway stations into Digital Hubs by providing public Wi-Fi at railway stations across India".

Brief us about RailTel's business model and its key clientele­

RailTel Corporation is a "Mini Ratna (Category-I)" Central Public Sector Enterprise and one of the largest neutral telecom infrastructure providers in the country owning a Pan-India Optic Fibre Network (OFC) on exclusive Right of Way (ROW) along the railway route. As on November 30, 2020, the OFC network has presence reaching 58,742 Route Kilometers and encompassed towns & cities of the country including rural areas.

Our transport network is built on high-capacity Dense Wavelength Division Multiplexing Technology and an Internet protocol/ multi-protocol label switching (“MPLS”) network over it to support mission critical communication requirements of Indian Railways and other customers. Our service portfolio includes Information and Communication Technology and Information Technology services like Internet leased Line, MPLS-VPN, Data Centre Services, Security Operation Centre as a Service, Tower  and Rack and space collocation, Wi Fi services, HD video conferencing,  IT consultancy, retail broadband and many more. Hence our revenue stream is not dependent on a single sector.

The organisation has been profitable since FY 2007 and in Fiscal 2020, the organisation has reported the highest net profit margin amongst key telecom companies.  Besides that, it is important to note that the operations have been funded entirely by Internal accurals since Fiscal 2013 We are a debt free company. Our revenue from operations have grown at a CAGR of 7.47% from ₹ 9,767.79 million in Fiscal 2018 to ₹ 11280.54 million in Fiscal 2020 .  We have recorded our highest ever consolidated income (Rs. 11,660.05 million) in the previous financial Year (FY 19-20). This is a growth of 12.3% over consolidated income of Rs.  10382.66 million in FY 18-19. We have also posted a profit before tax amounting to Rs. 1,847.60 million and net Profit of Rs. 1,410.66 million on consolidated basis.
 
We work closely with a wide range of clients from different sectors and regions and our key clientele includes major PSUs and corporates like Ministry of Railways, Major telcos, Govt ministries, state govts (Rajasthan, Kerala, Haryana, etc.), PSUs, RBI and various public sector banks.

Can you tell us more about the station Wifi and its future plans?

RailTel has undertaken the responsibility to transform Railway stations into Digital Hubs by providing public Wi-Fi at railway stations across India. As on November 30, 2020, RailTel has provided state of the art public Wi-Fi facility at 5,848 Railway stations across country. (These wi-fi provisions at the station premises are accessible to anyone with a smartphone and an active connection (post verification through OTP sent via sms). This initiative has received phenomenal response from the users and their interest towards the service offering has seen an uptrend). As of fiscal 2020, we recorded over 14 million unique users per day with an average of 29 million user logins per month. In the same period an average of 8200 TB of aggregated data consumption per month with an average data usage per user amounting to 283 MB per month was also recorded. 

Due to the unforeseen circumstances caused due to the Covid 19 pandemic the installation work of the necessary infrastructure for “Railwire” at various stations had to be put on halt as the movement of equipment and manpower was restricted especially in remote areas. However, with businesses and activities coming to normalcy we have re-started the implementation work and endeavor to catch up on the time lost and complete the work in remaining locations.

Your retail broadband service RailWire has seen good growth in terms of subscribers. How did RailTel manage that during the pandemic situation, kindly brief us?

Our 'Railwire' retail broadband service is a collaborative model where we create an Ecosystem of local cable providers and entrepreneurs for last mile connectivity called access network providers (ANPs). Due to people working from home and schools & colleges starting online classes over the past few months, we have seen a rise in the number of subscribers. As on November 30, 2020, Railwire had a Subscriber base of 2,87,581 Users. Between the period of March 2020 to November 2020 RailWire Subscriber base has grown by almost 2.2 times.
 
We have also been able to add 1,408 ANPs between April 1, 2020 and November 30, 2020 taking our total ANPs count to 4,769. With growing numbers of ANPs RailWire’s reach is becoming better to provide retail broadband services.

Tell us more about E-office

NIC e-office is a cloud enabled software application developed by National Informatics Centre and is hosted from RailTel’s two tier III certified data centres. The project, which we are currently implementing in a phased manner, we believe allows the Indian Railways to digitize their manual records and to function in a more transparent and efficient way. The first two phases, have been completed in March 2020 and May 2020. As on date, e-office has been implemented in - 107 Indian Railways establishments. This project is also reducing carbon foot print
 
As on November 27, 2020, a total of 9,31,896 e-files, and 39,80,182 e-receipts, i.e. emails, bills, office orders, generated by 1,19,068 Indian Railway users, are hosted at our data centers. Use of the NICs portal by Indian Railway employees has increased by 7.2 times for e-files and 8.5 times for e-receipts between April and November 2020 and during the lockdown. You can access the application from anywhere, since it is on a secured Virtual Private Network.
 
For the third phase of the project, we have recently signed an MoU with railways to cover workshops, audit offices, the RPSF office and other Indian Railways establishments. We are also implementing NIC e-office suite for a number of PSUs.
 
You are also into Data Centre business. What are the opportunities you see in this area?
 
We have 2 Tier III Data Centers accredited by UPTIME USA at Gurugram and Secunderabad. Our data center offers a range of data center services from our data centers, including Infrastructure as a Service or IaaS, dedicated hosting, managed services, cloud storage, managed e-Office services, disaster recovery services and Aadhar authentication services.
 
The Data Centre Business is more likely to see demand given the current situation where there is an increasing trend of companies that adopting digital practices in their business operations. The potential growth will be helped by the fact that Artificial Intelligence, the Internet of Things, Big Data and Digitalization will become the necessary tools for companies to thrive in a competitive market. We believe and see an opportunity to use our RailCloud as cloud computing becomes a pre-requisite and basic requirement.
 
 
How do you plan to tackle the growing Cyber Security Risk?
 
With the rising need for digitalization, there is also an increase in cyber security threats. A specialized Security Operation Centre (SOC) has been set up to provide our customers with centralized and consolidated cyber security incident prevention and security event monitoring services.
 
With detection response capabilities, our Security Operations Centre as a Service (SOCaaS) proactively tackles the growing threat to Data Security. The cornerstone of our SOC technology stack is the security information and event management solution. Other technologies that are part of the stack include endpoint detection and response which provides host level telemetry for both near real-time as well as forensic investigation, network traffic analysis used to investigate alerts and obtain additional context about suspicious activity in the network, packet capture for forensics, sandbox for malware analytics, vulnerability assessment tools, web application and network firewalls, auto ticketing tool.
 
We are able to provide both offsite and onsite security solutions for government organizations that cannot send data offsite due to compliance purposes.
 
How has the company strategized to sustain during Covid?

The COVID-19 pandemic has not only forced companies across sectors to turn to stable operations and business continuity on technology-enabled platforms, but also accelerated the adoption of digital imperatives. During and post lockout, we saw a rise in demand for our HD video conferencing service, e-office, broadband subscribers etc. We are therefore more focused on services and solutions that are in high demand in this pandemic era and in the future. Our retail broadband service- ‘RailWire’- is also seeing good growth with subscribers increasing more than 2.2 times since March 2020.

Additionally, RailTel is a key partner to the digital transformation taking place at Indian Railways and is also continuously engaged in executing mission critical projects for the Government of India such as National Knowledge Network, Campus Wi-Fi at Universities & Bharat Net.
 
What are your expectations from the IPO? 

Our draft red herring prospectus for floating an initial public offering of 8,66,53,369 shares was filed on September 30, 2020 with the Securities Exchange Board of India. We are currently in the process of meeting institutional investors and the IPO launch will be subject to receipt of requisite approvals, market conditions and other considerations.

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