Railtel Corporation of India Ltd Management Discussions.

1. Economy Overview

Introduction

India is a developing country and our economy is a mixed economy where the public sector co-exists with the private sector.

India is likely to be the third largest economy with a GDP size of $15 trillion by 2030 says Standard Chartereds Super-Cycle Report. The economy of India is currently the worlds fourth largest in terms of real GDP (purchasing power parity) after the USA, China and Japan and the second fastest growing major economy in the world after China.

Market size

Indias gross domestic product (GDP) (at constant 2011-12 prices) was estimated to be Rs 145.65 lakh crore (US$ 2.06 trillion) for 2019-20, growing 4.2 per cent over the previous year according to IBEF reports.

India retained its position as the third largest start-up base in the world with over 8,900-9,300 start-ups with 1,300 new start-ups getting incorporated in 2019 according to a report by NASSCOM. India also witnessed the addition of 7 unicorns in 2019 (till August 2019), taking the total tally to 24.

Indias labour force is expected to touch 160-170 million by 2020 based on the rate of population growth, increased labour force participation and higher education enrolment among other factors according to a study by ASSOCHAM and Thought Arbitrage Research Institute. Indias foreign exchange reserves reached Rs 37.31 lakh crore (US$ 493.48 billion) in the week up to May 29, 2020 according to the data from RBI.

Recent Developments

With an improvement in the economic scenario, there have been investments across various sectors of the economy. The mergers and acquisition (M&A) activity in India stood at US$ 28 billion in 2019, while private equity (PE) deals reached US$ 48 billion. Some of the important recent developments in Indian economy according to IBEF reports are as follows:

Merchandise export and import (in US$ terms) declined by 4.8 per cent and 9.1 per cent, respectively, in 2019-20.

The Purchasing Managers Index (PMI) stood at 30.8 in May 2020, showing contraction in the sector because of coronavirus-related restrictions.

Gross tax revenue stood at Rs 15.04 lakh crore (US$ 215.28 billion) in 2019-20 income tax collection contributed Rs 4.80 lakh crore (US$ 68.14 billion) to it.

In 2019, companies in India raised around US$ 2.5 billion through 17 initial public offers (IPO).

Indias Foreign Direct Investment (FDI) equity inflow reached US$ 469.99 billion between April 2000 to March 2020, with maximum contribution from services, computer software and hardware, telecommunications, construction, trading, and automobiles.

Indias Index of Industrial Production (IIP) for 2019-20 stood at 129.2.

The combined index of eight core industries stood at 137 in March 2020. Its cumulative growth was 0.6 per cent in 2019-20.

Consumer Price Index (CPI) Combined inflation was 5.9 per cent in March 2020 as compared to 6.6 per cent in February 2020. The annual consumer price inflation increased to 4.8 per cent in 2019-20 from 3.4 per cent in 2018-19.

Around 12 million jobs in a year were created in India during 2015-19.

India improved its ranking in World Banks Doing Business Report by 14 spots over last year and was ranked 63 among 190 countries in the 2020 edition of the report.

India is expected to have 100,000 start-ups by 2025, which will create employment for 3.25 million people and generate US$ 500 billion in value as per Mr T V Mohan Das Pai, Chairman, Manipal Global Education.

Government Initiatives

The first Union Budget of the third decade of 21st century was presented by Minister for Finance & Corporate Affairs, Ms Nirmala Sitharaman in the Parliament on February 1, 2020. The budget aimed at energising the Indian economy through a combination of short-term, medium-term, and long-term measures.

Total expenditure for 2020-21 is budgeted at Rs 37.14 lakh crore (US$ 531.53 billion), an increase of 13 per cent from 2019-20 (revised budget estimates).

Numerous foreign companies are setting up their facilities in India on account of various Government initiatives like Make in India and Digital India. Mr Narendra Modi, Prime Minister of India, launched Make in India initiative with an aim to boost countrys manufacturing sector and increase purchasing power of an average Indian consumer, which would further drive demand and spur development, thus benefiting investors. The Government of India, under its Make in

India initiative, is trying to boost the contribution made by the manufacturing sector with an aims to take it to 25 per cent of the GDP from the current 17 per cent.

Besides, the Government has also come up with Digital India initiative, which focuses on three core components: creation of digital infrastructure, delivering services digitally and to increase the digital literacy.

Some of the recent initiatives and developments undertaken by the Government are listed below:

The Prime Minister of India, Mr Narendra Modi announced various economic packages, having a cumulative worth of around Rs 20 lakh crore (US$ 283.73 billion) and being almost 10 per cent of Indias GDP.

Pradhan Mantri Garib Kalyan Package (PMGK) was introduced in April 2020 to provide relief to underprivileged and help them fight the battle against COVID-19. The budget allocated to the scheme was Rs 1.70 lakh crore (US$ 24.12 billion).

India is expected to attract investment of around US$ 100 billion in developing the oil and gas infrastructure during 2019-23.

The Government of India is going to increase public health spending to 2.5 per cent of the GDP by 2025.

For implementation of Agriculture Export Policy, Government approved an outlay Rs 206.8 crore (US$ 29.59 million) for 2019, aimed at doubling farmers income by 2022.

Under the Pradhan Mantri Awas Yojana (Urban), Government has sanctioned more than 96.50 lakh houses under PMAY(U) and approved 606 proposals for the construction of 3,31,075 houses with an overall investment of Rs 15,125 crore (US$ 2.16 billion).

India has registered a 26.9 per cent reduction in Maternal Mortality Ratio (MMR) since 2013.

Around 26.02 million households were electrified by 31st March 2019 under Pradhan Mantri Sahaj Bijli Har Ghar Yojana (SAUBHAGYA).

In the mid-term review of Foreign Trade Policy (FTP) 2015-20, the Ministry of Commerce and Industry enhanced the scope of Merchandise Exports from India Scheme (MEIS) and Service Exports from India Scheme (SEIS), increased MEIS incentive for ready-made garments and made-ups by 2 per cent, SEIS incentive by 2 per cent and increased the validity of Duty Credit Scrips from 18 months to 24 months. In April 2020, Government extended Foreign Trade Policy for one more year (up to March 31, 2021)

Road Ahead

Indias GDP is expected to reach US$ 5 trillion by FY25 and achieve upper-middle income status on the back of digitization, globalization, favorable demographics, and reforms.

India is also focusing on renewable sources to generate energy. It is planning to achieve 40 per cent of its energy from non-fossil sources by 2030, which is currently 30 per cent, and have plans to increase its renewable energy capacity to 175 gigawatt (GW) by 2022.

India is expected to be the third largest consumer economy as its consumption may triple to US$ 4 trillion by 2025, owing to shift in consumer behaviour and expenditure pattern, according to a Boston Consulting Group (BCG) report. It is estimated to surpass USA to become the second largest economy in terms of purchasing power parity (PPP) by 2040 as per a report by PricewaterhouseCoopers.

2. Telecom Industry

2.1 Telecom Industry Characteristics

India is the worlds second-largest telecommunications market. The telecom market can be split into three segments – wireless, wireline and internet services.

The wireless market segment accounted for 98.25 per cent of the total subscriber base as of January 2020. Rural subscribers comprised 43.69 per cent of the total telephone subscribers as of January 2020.

India is also the second largest country in terms of internet subscribers. As of 2019, India holds the worlds highest data usage per smartphone, averaging 9.8 GB per month. It is expected to double to 18 GB by 2024. App downloads in the country increased from 12.07 billion in 2017 to 19 billion in 2019 and is expected to reach 37.21 billion by 2022. The contribution of 3G and 4G data usage in total volume of wireless data usage was about 5.72 per cent and 93.65 per cent, respectively, during Q2 FY19-20. Share of 2G data usage remained 0.62 per cent during this quarter. India had over 500 million active internet users (accessed Internet in the last one month) as of May 2020.

Gross revenue of the telecom sector stood at Rs 121,527 crore (US$ 17.39 billion) in FY 19-20 (till September 2019). Strong policy support from the Government has been crucial to the sectors development. Foreign Direct Investment (FDI) cap in the telecom sector has been increased to 100 per cent from 74 per cent. FDI inflow into the telecom sector during April 2000-December 2019 totalled US$ 37.11 billion.

The Government of India, through its National Digital Communications Policy, foresee investment worth US$ 100 billion in the telecommunications sector by 2022.

India ranks as the worlds second largest market in terms of total internet users. The number of internet subscribers in the country increased at a CAGR of 45.74 per cent during FY 06-FY19 to reach 636.73 million in 2018-19. The internet subscribers reached 687.62 million till September 2019. Total wireless data usage in India grew 10.58 per cent year-on-year to 19,838,886 terabytes between July-September 2019.

Further, India is also the worlds second largest telecommunications market, total telephone subscriber base and tele-density reached 1,177.02 million and 87.45 per cent, respectively, as on January 2020. Over the next five years, rise in mobile-phone penetration and decline in data costs will add 500 million new internet users in India, creating opportunities for new businesses.

2.2 Investment/Major development

With daily increasing subscriber base, there have been a lot of investments and developments in the sector.

FDI inflows into the telecom sector during April 2000 December 2019 totalled to US$ 37.11 billion, according to the data released by Department for Promotion of Industry and Internal Trade (DPIIT).

Some of the developments in the recent past are:

As of January 2020, more than 542 banks have been permitted to provide mobile banking services in India.

In December 2019, Airtel disclosed its plans to invest US$ 2.86 billion in its business as a part of companys annual target.

As of August 2019, Jios IoT platform is ready to be commercially available from January 2020.

In August 2019, Reliance commercially launched Jio GigaFiber as wired broadband service.

2.3 Government Initiatives

The government has fast-tracked reforms in the telecom sector and continues to be proactive in providing room for growth for telecom companies. The Indian Government is planning to develop 100 smart city projects, where IoT would play a vital role in development of those cities.

The National Digital Communications Policy 2018 has envisaged attracting investments worth US$ 100 billion in the telecommunications sector by 2022. Some of the other major initiatives taken by the government are as follows:

In January 2020, Government of India allowed 100 per cent FDI in Bharti Airtel.

By March 2020, the government aims to achieve 45 billion digital transactions for banks with the help of PoS machines, transactions enabled merchants, which have been added in firms. As of January 2020, more than 542 banks have been permitted to provide mobile banking services in India.

The Department of Information Technology intends to set up over 1 million internet-enabled common service centres across India as per the National e-Governance Plan.

FDI cap in the telecom sector has been increased to 100 per cent from 74 per cent; out of 100 per cent, 49 per cent will be done through automatic route and the rest will be done through the FIPB approval route.

FDI of up to 100 per cent is permitted for infrastructure providers offering dark fibre, voice mail.

The Government of India has introduced Digital India programme under which all the sectors such as healthcare, retail, etc. will be connected through internet

Achievements

Following are the achievements of the government in the past four years:

Department of Telecommunication launched ‘Tarang Sanchar - a web portal sharing information on mobile towers and EMF Emission Compliances.

Value of Unified Payments Interface (UPI) transactions crossed 1 billion-mark and witnessed transaction value of Rs 1.91 lakh crore (US$ 27.33 billion) in October 2019.

As of July 2019, India achieved 100 percent digitisation of cable TV network.

Six-fold increase in Government spending on telecommunications infrastructure and services in the country from Rs 9,900 crores (US$ 1.41 billion) during 2009-14 to Rs 60,000 crores (US$ 8.55 billion) (actual + planned) during 2014-19.

Over 75 per cent increase in internet coverage from 251 million users to 446 million

Country-wide Optical Fibre Cable (OFC) coverage doubled from 700,000 km to 1.4 million km.

2.4 Impact of COVID on adoption of Digital services

The Covid-19 pandemic is shaping a new world order, triggering a transformative impact on economies and altering the ecosystem of businesses. The global outbreak has not only compelled businesses across industries to turn to technology-enabled platforms for safe operations and business continuity, but also accelerated the adoption of digital imperatives. Even as the pandemic has transformed business models globally, organizations are augmenting their digital capabilities and increasingly relying on digital solutions to future-proof their businesses.

There is substantial increase in usage of RailTel Services such as TpasS, e office,BW usage & increase in RailWire subscribers due to people working from Home, Schools started online classes and digital access to services across every domain.

2.5 National Broadband Mission

In Dec-19, government launched the National

Broadband Mission which aims to fast track growth of digital communications infrastructure, bridge the digital divide and provide affordable and universal access of broadband for all. The main objective of the NBM is to provide broadband access to all villages by 2022. The ambitious project will involve laying down around 30 Lakhs kilometre route Optical Fiber Cable, increase tower density from 0.42 to 1.0 tower per thousand of population by 2024 and significantly improve quality of services for mobile and internet. The mission envisages Rs 7 lakh crore investment in next 3 to 4 years.

2.6 TRAI Regulations

Telecommunication has emerged as a key driver of economic and social development in an increasingly knowledge-intensive global scenario. After going through a pioneering transition in the last two decades, the Indian telecommunication sector has become the

Worlds second largest telecommunication market in terms of the number of subscribers. In the upcoming years, this sector will play a prominent role in the growth of Digital Economy, Industry 4.0, and in successful implementation of Government programmes such as Digital India, Make in India, Startup India, Smart Cities, etc. Latest technological developments and the aforementioned programmes will provide more opportunities for the telecom sector During 19-20, various recommendations were made to the Government by TRAI during the year.

Enhancement of Scope of Infrastructure Providers Category-I (IP-I) Registration

Licensing framework for Audio Conferencing/ Audiotex/ Voice Mail Services

Platform Services offered by DTH Operators

Allotment of spectrum to Indian Railways for Public Safety and Security services

KYC of DTH Set Top Boxes , Review of Terms and Conditions for registration of Other Service Providers (OSPs)

Entry Level Net worth requirement of Multi-system

Operators in Cable TV services.

During 19-20, TRAI initiated various consultations on the following

Provision of Cellular backhaul connectivity via Satellite through VSAT under Commercial VSAT CUG Service Authorization

Traffic Management Practices (TMPs) and Multi-Stakeholder Body for Net Neutrality

Tariff Issues of Telecom Services

Interoperability of Set Top Box

Review of Interconnection Usage Charges

Cloud Services

Reserve Price for auction of FM Radio channels

Developing a unified numbering plan for fixed line and mobile services

Reforming the Guidelines for Transfer/Merger of

Telecom Licenses

Platform Services offered by DTH Operators

3. RailTel An Overview

RailTel Corporation of India Ltd is a "Mini Ratna (Category-I)" CPSU formed in the year 2000 as a Schedule A CPSU, under the Ministry of Railways, in line with NTP 99. RailTel has exclusive seamless Right of Way (ROW) along 67,415 KM of Railway Track passing through 7321 stations across the country.

We are one of the largest neutral telecom infrastructure providers in the country owning a Pan-India optic fiber network.

RailTels high speed OFC Backbone Network shall ultimately cover the entire railway network across the country. In high bandwidth backbone segment on a secured and distinct right of way, RailTel occupies a proud place with its unparalleled network. The network has the ability to provide the mission critical customized connectivity platform for enhanced corporate efficiency and growth. RailTel is creating Point of Presence at every Railway station enroute which are spaced at 8-10

Kms. At all the stations enroute STM-1/4 equipment offering bandwidth upto (155/622 Mbps) is deployed primarily to meet Railways requirement and serve the unserved and the underserved. The distribution layer network of STM-64/16 (10G/2.5G) spaced at 40-60 KMs is deployed to connect important towns/cities of the country. Presently this network is available at more than 600 cities in multiple rings of STM-64/16. RailTel has PAN India Telecom Network with capability of Service delivery from 2Mbps to 100Gbps links.

RailTel Network comprises of various technologies viz.

Next Generation Network (NGN), Synchronous Digital Hierarchy (SDH), Packet Transport Network (PTN), Dense Wavelength Division Multiplexing (DWDM), Internet Protocol- Multi Protocol Label Switching (IP-MPLS) which are maintained by round the clock Network Operation Centres and trained field manpower. Total 5500+ Backbone & Access PoPs are available. All the equipments provided on the network are of State-of-the-Art Technology and are as per International Telecom

Standards. The network is spread along the length and breadth of the country covering all the important and major cities including small towns. With the spread and reach, RailTel is in a position to serve 70% of the countrys population. With its collaborative RailWire retail broadband platform, RailTel is present on fiber in 1409 Govt schools in Kerala and offering reliable broadband services to a no of retail and enterprise customers across the country. The access network of

RailTel in cities and towns spans to another 5805 kms and helps deliver high speed reliable connectivity to close to 728 institutes of higher learning like IITs, IIMs, IISC, SAC, Agricultural and research institutes and universities across the country.

RailTels OFC based network is designed in defined hierarchical form with Core, distribution and edge layer. RailTels OFC based communication system comprises of various technologies and is capable of delivering telecom services to its customer with high SLA (Service Level Agreement)

With the presence of high speed, resilient and state of the art telecom network, backed with exclusive Right of way (RoW), RailTel is capable of delivering high SLA services to its esteemed customers. RailTel is a continuously growing company, technically and financially, to meet all the present and future Telecom and IT requirements of Indian Railways as well as of all government and private sectors. We take pride in sharing that RailTel remains the ONLY consistently profitable, consistently dividend paying and Debt free company in Telecom space under the Govt of India.

4. Network Strength

RailTel has exclusive seamless Right of Way (ROW) along 67,415 KM of Railway Track passing through 7321 stations across the country. Using this ROW, RailTel has so far laid 56692 RKMs of OFC and OFC lit is 53944 RKMs till March 31, 2020. Works on another > 4000 KMs are in various stage of execution. RailTels high speed OFC Backbone Network shall ultimately cover the entire railway route across the country. In high bandwidth backbone segment, RailTel ocupies a proud place with its unparalled network. The network has the ability to provide the mission critical customized connectivity platform for enhanced corporate efficiency and growth.

The glimpse of various networks is as follows:

SDH (Synchronous Digital Hierarchy) Network: Presence across the nation (PAN) with more than 4500 nodes. The network is capable of providing various services like E1 (2Mbps), DS3 (45 Mbps), STM-1/4/16/64 (155 Mbps / 622 Mbps/ 2.5Gbps / 10Gbps). The Networks covers all major cities of India and provides high availability of synchronous services.

PTN (Packet Transport Network) Network: PAN India Presence with more than 400 nodes. The network is capable of providing various services like 1G and 10G. The Networks covers all major cities of India and provides high availability of packet services.

DWDM Network: PAN India Presence with more than 200 OADM (Optical Add/Drop Multiplexer) nodes. The network is capable of providing various services like 1G, 10G and 100G. The Network covers all major cities of India and provides high availability of services.

IP-MPLS Network: PAN India Presence with Four Tier Architecture and High availability of Tier-I Nodes. The network is capable of providing services with granularity from 1 Mbps to 10 Gbps. The Network covers all major cities of India and provides high availability of services.

5. New Initiatives :

RailTel since its formation has kept pace with the introduction of new services and technology to keep its relevance in the market. The new service portfolios shall in long run help in increasing revenues as well as fully supplementing the existing services to its customers.

During the year also RailTel has initiated some new services as detailed in the following paragraphs:

5.1 Railway Station Wi-Fi Services

Contributing towards fulfillment Minister Sh. Narendra Modi Jis Digital India dream and with a vision of Honble Minister of Railway Sh. Piyush Goyal of turning Railway stations into platforms for Digital inclusion, RailTel is transforming Railway stations into Digital hub by providing public Wi-Fi at all Railway Stations. As on March-2020 5655 stations were live with RailTels RailWire Wi-Fi with 1.59 Crore unique users per month. This is one of the largest and fastest public Wi-Fi networks of the world. The response to the service has been phenomenal, with around 2.22 crore user login in a month and around 9000 TB of aggregated data consumption. Passengers use this facility for streaming High Definition (HD) Videos, download of movies, songs, games, and do their office work online.

The Station Wi-Fi was very popular with Railway users and the community around Railway stations that it generated global and domestic media attention.

RailTel has started a programme RailWire Saathi in which small kiosks have been set up at 193 rural stations with RailWire Wi-Fi and will train local unemployed youth to leverage the kiosks infrastructure for becoming digital entrepreneur.

Through the RailWire Saathi model, unemployed youths are being trained and supported to set up a kiosk with high speed internet connectivity and provide a platform to provide an array of Digital services which will make the business sustainable and also provide access to the community services like citizen services which includes applying for government documents such as Aadhar, PAN etc.; loan eligibility check and health screening; assisted e-commerce; utility bill payments; financial inclusion would be provided on the Saathi platform.

With these initiatives rail users and the community around the Railway station can find assistance on e-governance services, compare and find the best credit facilities and insurance, look for best deals on various e-commerce platforms, find out where to market their produce etc. Railway stations can truly become a digital hubbefittingthe DigitalIndia vision

5.2 Video Surveillance System (VSS)

RailTel is also executing provision of IP camera-based Video Surveillance System at 6124 railway stations and 7020 premium train coaches and EMU coaches. This will go a long way in enhancing the safety and security of the passengers travelling over the IR network. RailTel is also integrating the various standalone video surveillance system installed at various stations by respective zonal railways so that the video recordings can be seen and monitored at the Divisional and Zonal head quarter level centrally. Under the project, all cameras to be provided in station premises will be networked on optical fiber cable and brought to a centralized place (CCTV control room) from where they shall be viewed on multiple LCD monitors by Railways security personnel. The system shall provide high capacity storage devices at stations to store recording of CCTV footage for a defined period. CCTV cameras have already been provided at 225 stations.

5.3 E-office in Indian Railways

RailTel has also taken up the work of implementing NIC E-Office system for Indian Railways. E-Office project is a Mission Mode Project (MMP) under the National e-Governance Programme of the Government of India. The project aims to usher in more efficient, effective and transparent inter-government and intra-government transactions and processes. Currently, e-Office has been implemented in all 106 Units of Indian Railways against the sanctioned work of Phase-I and Phase-II. Under Phase-I Project of e-Office, 60 Railway Units consist of all Zonal Railway along with one division (including entire SCR), PUs, RDSO, NAIR, CTIs & Metro Kolkata and under Phase-II Project, balance 46 Divisions have been covered. As one date, more than 1 lakh users of Indian Railways are using e-Office Application. After implementation of e-Office in 60 Workshops which has been sanctioned by Railway Board, entire Indian Railways will be in e-Office Platform.

During the COVID crisis 25 new establishments were commissioned with NIC e-office. This has proven to be boon in a crisis time and part of Railway workforce was able to WORK FROM HOME, which would have been impossible in case of manual filing system. RailTel has also created Virtual Private Network for 10,000 users of Indian Railways.

5.4 CoD (Content on Demand)

RailTel will be providing the Content on Demand service to passengers in trains by preloading multilingual content (Movies, Music Videos, General Entertainment, Lifestyle etc) on media servers installed in trains. With COD, passengers will be able to enjoy uninterrupted free/ Subscription based high Quality buffer free entertainment streaming service on their personal devices during their train journey despite unstable mobile network in a moving train. The content will be periodically refreshed. CoD platform will also provide e-commerce/m-commerce services in various domains e.g. travel bookings (cab, bus, train) etc. and provide various innovative solutions in digital marketing domain. The Content on Demand service will not only improve overall passenger experience but at the same time will increase the non-fare revenue through multiple monetization models.

The digital entertainment service provider has been finalised and work has been initiated. Service to be provided on 8731 trains including 5728 Suburban Trains for which Roll out will be done over a period of 2 years.

5.5 Railway Display Network

This is an initiative to provide contextually rich and relevant information to Rail users along with public awareness messages & entertainment content and use the latest digital technologies to unlock the true advertisement potential of the footfalls in stations. RDN is planned to be built and operated on a self-sustainable model.

The display screens will be provided at the station buildings, entrance, concourse, platforms, waiting rooms and foot-over-bridges but excludes circulating areas. Various passenger related information from most appropriate sources like train charting server, NTES, PRS etc shall be provided. The Railway display network with the cloud analytics will provide the ability to generate rich analytics and context to provide Railway users accurate and relevant information to improve the Railway travel experience. RDN will also be a platform for targeted live messaging on audio, video or social media to display information of national importance and citizen services. The analytics and ad exchange provides a transparent way to unlock the true advertising potential of the footfalls in the Railways.

Project is to be implemented at 2000 stations (all A1,A,B,C & D category stations). Tender have already been invited

5.6 Hospital Management Information System (HMIS)

RailTel has been entrusted with the work of Hospital Management Information System over Northern Railway Central Hospital and Delhi Division hospitals. This is integrated clinical information system for improved hospital administration and patient health care for providing an accurate, electronically stored medical records.

Proof of Concept for HMIS implementation over SCR has already been completed successfully.

5.7 Modern Train Control System

RailTel Enterprises Limited (REL), a wholly owned subsidiary company of RailTel Corporation of India ltd., has been entrusted with the work of Modern Train Control system project for modernizing railway signaling system in 4 railway sections. The Modern Train Control system project is one of the most ambitious modernization projects of Indian Railways which envisages upgradation of signalling system at par with the world class standard.

The Modern Train control system will be implemented for 165 Route KM (RKM) on Chennai Central- Mumbai section for South Central Railway, 145 RKM on Howrah-Chennai Central section for East Coast Railway, 155 RKM on New Delhi- Chennai central Section for North central Railway and 175 RKM on Mumbai- Howrah section for Central Railway. These are some of the busiest railway route with heavy traffic. MTCS will help enhance safety drastically reduce congestion in rail network and increase line capacity, improving punctuality as it can eliminate train delays due to automated signaling and real time information of train movements, eliminating the need for manual data logging. It will also help to increase average speed of trains due to automation of train operations. Tender have already been invited and are under final stages of evaluation.

5.8 Modernization of Signaling System

RailTel Enterprises ltd, a wholly owned subsidiary of RailTel Corporation of India Ltd., has been awarded the work of replacement of old mechanical signalling equipment with state-of the-art electronic interlocking system at 13 stations of Northern Railway. The existing mechanical leasing is a strategic customer engagement product signalling systems are using lever frames to both lower the signal and change the tracks. The new Electronic Interlocking signalling system will now enable lowering the signal and changing of tracks by click of a mouse and will enhance safety and improve efficiency of train operation. There are total 13 stations which have been assigned to REL, out of which 3 are in Delhi Division and 10 are in Ambala Division. Work has already been started on provision of Electronic Interlocking.

5.9 State Wide Area Network

RailTel is also helping create and maintain the State Wide Area Networks (SWAN) in various states of the country. In Haryana RailTel is maintaining the complete SWAN IT infrastructure and upgrading the same where ever required and in Rajasthan radio frequency connectivity and provision of Wi-Fi upto village level is being carried out. In Kerala RailTel is upgrading the State Wide Network with new generation equipments and providing Facility Management Services.

6 Existing Services

While the new areas of business open additional avenues for RailTel, RailTel continues its focus on the present services being offered.

6.1 NLD Services

Continuing the efforts in NLD segment, RailTel has pursued its high capacity services from Lease Line growth especially with Government departments, Enterprises, Banks, etc. Last year also saw positive traction in leasing of circuits by MNCs, Govt. customers, Telecom operators and MSOs. Selection of RailTel as one of the major partners in National Knowledge Network (NKN) has contributed significantly in revenues from NLD services as demand for higher capacities is expected in this network. RailTel has managed to generate 415 Cr. revenue from this segment.

6.2 IP-1 Services

Tower colocation business translates to a good alternative for RailTel to monetize its towers infrastructure. Dark fiber for RailTel. The sector needs renewed focus as it is the highest bottom line business with added advantage of extensive last mile access as a reciprocal arrangement.

RailTel is also refocusing on managed services in partnership with a leading infrastructure provider who shall be responsible for management and marketing of RailTel towers to various customers. This shall help in further consolidating its market with existing customer arrangements with all mobile operators across India to lease these sites for colocation purposes. Till Mar20, RailTel has managed to generate 163 Cr. revenue from this segment.

6.3 ISP Services

RailTel is also providing Nationwide Internet & Broadband services to all major customer segments like ISPs, Educational Institutions and various Government departments. During the year RailTel has bagged several orders from various Government departments, PSUs and educational institutes. RailWire broadband services have registered 3572 new subscribers each month, with 1,30,104 active subscriber base on Mar 20. Around 3361 Local Cable Operators have partnered to provide last mile connectivity to end consumers. Total revenue of 166 crores (including RailWire accruals) was achieved during the year.

6.4 Service to Railways

RailTel was established with the vision to modernize Railways train control, operations and safety system networks. Over the years, RailTel has implemented various telecom & IT infrastructure projects as well as various Value Added Services for Indian Railways. This facilitated in spreading various Railways applications to remote and rural stations thus increasing customer satisfaction.

Short haul connectivity (station to station):

RailTel has created STM-4/STM-1 based network at every station to support data connectivity requirements from Indian Railways such as supporting the transfer of PRS/UTS/FOIS/mission critical information along with carriage of voice traffic such as emergency communication during disaster management.

Long haul connectivity: RailTel provides MPLS based Wide Area Network (Railnet) to support administrative data communication needs of various field organizations of Indian Railways. The network interconnects Ministry of Railways with 18 Zonal HQs, 70 Divisions and Production units, for sharing of information from all depts. RailTel is now in the process to connect all Tier-1 PRS center on MPLS VPN connectivity with the disaster recovery site of CRIS which shall increase the reliability of these links.

NGN for voice traffic: All major telephone exchanges of Indian Railways are connected with future proof NGN technology. This infrastructure is very critical for day to day administrative functioning of Railways.

Broadband: In addition, RailTel has commissioned DSLAMS on existing Railway exchanges to provide Broadband services to more than a lakh of homes and offices of Indian Railways in both urban and rural areas using the existing Copper wire last mile of Railways. This shall not only help Railway employees but shall also help in increasing Broadband penetration in the country in line with the National Telecom Policy.

Facilitating CUG services: RailTel facilitated

Indian Railways by choosing an operator through an open process for Mobile CUG connections for A Mini Ratna Enterprise 2,88,500 officials of Indian Railways which is arguably the largest CUG plan within India. It has greatly facilitated in seamless communication among the officials for improved train operations.

6.5 Data Center

RailTel has two UPTIME (USA) certified Tier-III Data Centers in place at Secunderabad and Gurugram.

RailTel offers a host of Data Centre services like Colocation Services, Managed services, Cloud Computing, Managed e-Office, Aadhaar Authentication Services, Dedicated Solutions etc, from these two state-of-the-Art Data Centres with combined total gross capacity of more than 6000 Sq.ft Server Farm area. RailTel has started Security Operations Centre (SOC) for monitoring, analyzing and protecting Data centre services from cyber-attacks. The Data Centre and SOC support services are available 24* 7.

RailTel cloud services are backed by SLA of 99.95% and colocation services by SLAs of 99.983% which is one of the best by industry standard. The USP of RailTel Data centre is round the clock multi-layered Physical security at different levels, Very Early Smoke Detection System, IP CCTV System, Access Control System, Water Leak Detection System, Rodent Repellent System, and Building Management System. The on-site power system with redundant diesel generators feeding a N+N redundant UPS grid to offer the highest levels of power reliability. Besides Indian Railway, a number of Government customers trust RailTel for the Data Centre services. Data Centers Being registered with MeitY for providing cloud services to Govt. Departments & PSUs

6.6 Telepresence as a Service (TPaaS)

RailTels TPaaS an end-to-end, high-definition videoconferencing service that gives users a virtual, face-to-face meeting experience was launched in January-2015. Before adoption of TPaaS Indian Railways were spending huge amount of money and man hours for meetings and events. Post adoption of TPaaS the number of travels for meetings and events has dropped drastically saving manhour, travel and lodging expenses. Extensively used for inauguration of Rly facilities (131 events in last 1 year).

Being swifter, faster in decision making and crisis handling, lesser travel for meetings and events has also helped in saving significant The service now serves 530 elite users across 45 plus customers. The success is a result of the significant of use & 24X7 customer responsiveness of the RailTel team vis-a-vis the challenges faced with other service providers.

The RailTel Telepresence Services have often served events for the Honble Prime Minister of India, Minister of Railways, Minister of Industry & Commerce & Minister of Civil Aviation reaching out to places where making available even OB Vans would have been difficult at short notice. The services are offered on a monthly subscription basis requiring no investment into CAPEX by the customer while obviating the recurring need for investment due to technology obsolescence.

In the current Covid-19 crisis situation, to facilitate meetings from home, video conferencing facilities has been installed in the residence of General Managers of Zonal Railways and Production units of Railways for Meeting with Honble Minister of Railways, Honble Minister of State for Railways and Chairman Railway Board. This service is also being used for coordination between GMs and DRMs and otheramount officers carbonfootprints. who are participating through either Telepresence or WebEx ease from their residence. During the lockdown period there was phenomenal increase in usage of video conferring service with 25 times increase as compared to pre COVID time to 83,58,336-man minutes of meeting time.

6.7 SI Project Business

Continuing the efforts in Service Integrator business, RailTel has focused on SI Business during the year & various high volume orders for various government agencies are in pipeline.

Total revenue from the SI project business segment reached at around 330 Cr. ending Mar20 as against 280 Cr. in Mar19.

7. Facilitating Government of India Initiatives 7.1 National Optical Fiber Network

The Government of India has approved the project for the creation of a National Optical Fiber Network (NOFN) for providing Broadband connectivity to all 2.5 Lac Gram Panchayats (GPs), which has now been rechristened as ‘BharatNet.

Under the Phase-I of this project, RailTel is mandated to cover 10793 GPs covering 317 Blocks across Northern Eastern region states (Tripura, Meghalaya, Manipur, Mizoram, Nagaland & Arunachal Pradesh), Pondicherry in South & Gujarat (incl. Daman & Diu and Dadra & Nagar Haveli) in West. As of Mar20, 24691 KM of duct has been laid covering nearly 93.09% of GPs and 24037 KM of optic fiber to cover nearly 87..22% of the GPs.

8. Blueprint for the Future

Considering the dynamic nature of Telecom & IT industry in the shadow of COVID-19, it is always pertinent to closely look into the future & work out the strategy for the company. With this aim, RailTel keeps revisiting its policies, new areas of business and new customers areas. It is pertinent to have more services under RailTels portfolio to cover entire gamut of Enterprise services which shall provide further growth trajectory for RailTel. RailTel now needs to focus in developing extended capabilities in the area of e-office, CoD, RDN, VSS , Data Center centric services such as managed services & cloud, LTE (Long Term Evolution), IOT (Internet of Things) Platform and Analytics, TCAS (Traffic Collision Avoidance System), MTCS (Modern Train Control System), project execution, etc. In some areas these can be developed effectively using partnership models ensuring risk mitigation while delivering such services. In order to realize the vision of being the preferred telecom solutions and service provider for knowledge economy, RailTel would be following a three-pronged strategy of concentrating on optimizing the products & services bouquet, expanding the network and upgrading to a high capacity network, and modifying the organization design.

Execution of the strategy would be supported by state of the art improvements in internal business processes such as service assurance and new product development.

 

Products & Services: RailTel plans to enhance its focus on provision of services such as MPLS VPN, Internet Bandwidth, Telepresence, retail broadband (RailWire) that have high market attractiveness. At the same time,

RailTel also plans to invest resources into building capability for higher margin services such as Data Center services like cloud & managed services and ICT projects. Network enhancement: RailTel believes that its extensive network is its key differentiator in the market and hence a key value proposition in delivering services to its customers. RailTel thus plans to continue to invest in expanding its backbone network and deploying latest technologies to enable a high capacity next generation network in order to deliver sustained value to its customers and improve their experience with RailTels services.

 

Organization Design: RailTel plans to modify its organization design to suit changing business needs such as the Companys entry into enterprise IT services and execution of ICT projects & initiatives launched by the Central Government and various State Governments. Internal Processes: RailTel believes that strengthening of internal business processes is essential for efficient customer service delivery & cost efficiency that in turn would enable savings for higher investments in the future. RailTel plans to improve key business processes such as service assurance, key account management, management information systems (MIS) to improve competitiveness & e-office which enables employee to perform all work related activities online bringing efficiency & in working. RailTel also wishes to institute a dedicated new product development process that would enable RailTel to roll out quality products and services in the fast paced technology industry.

9. Financial Performance

During the financial year 2019-20, total revenue earned by RailTel is 1112 crore. Profit after Tax earned has been 138 crore and Profit before tax has been 181 crore. From NLD (Bandwidth & VPN) services, RailTel earned 415 Crore during the year. While earning from IP-1 services has been 163 Crores which includes revenues from tower & rack Colocation and Dark fiber leasing. While under ISP license (Internet & Broadband) RailTel has achieved revenues of 166 Crores.

10. Awards

During the year 19-20, RailTel received following awards for its excellent performance from various organizations.

The prestigious awards received by RailTel for various categories are as mentioned below:

Sh. Puneet Chawla, CMD RailTel, was conferred with the Top Rankers Excellence Award for "Excellence in Leadership"

Express Computer Digital Innovation Award for E-office implementation

7th Governance Now PSU award in Digital PSU category for e-office implementation

Digitally Empowered PSU at 3rd Cyber Security Conclave

Dun & Bradstreet PSU Award 2019 in the Telecommunication & IT services category

11. CSR Initiatives

RailTel is also actively involved in meeting its social obligations through the Corporate Social Responsibility programme and is actively supporting programmes for Digital Literacy, Education, Health and Physically challenged children. RailTel is currently running 7 Digital Literacy Centres (2 at Varanasi, UP, 1 at Satna, MP, 1 at Delhi, 2 at Bokaro, Jharkhand and 1 at Mewat Haryana) and 1 Skill Development Centre for women at Jahangirpuri, New Delhi. RailTel is contributing to better Menstrual Health of adolescent girls through its MHM programme in 180 government schools and 8 aspirational districts of Uttar Pradesh by installing incinerator and napkin vending machines. RailTel is contributing to primary school education through Mini Science Centres at govt schools aimed at making science and mathematics education fun through interactive models.

RailTel has also contributed Rs.12.15 Crore to PM Cares Fund amid unprecedented Covid-19 pandemic across the country.

RailTel, in association with Centre for Social Responsibility and leadership, New Delhi, has established a RailTel- Akansha Super 30 center where 30 underprivileged but talented students from different corners of Uttarakhand are provided free residential coaching and mentoring for 11 months for admission in reputed engineering colleges like IIT, NIT and state engineering colleges.

13. Human Resources

RailTel has made a conscious effort to keep evolving its practices in Human Resources and providing best experience and convenience to its employees.

To improve on its employee score RailTel has implemented e-office, which enables employee to perform all work related activities online bringing efficiency & in working. This initiative has benefitted most to the employees deputed in fields who can now work without a visit to territorial/regional offices. Keeping pace with the requirements of future requirements and new service diversifications, RailTel is continuously recruiting experienced and qualified manpower from different fields.

At the end of Mar20 total manpower strength was 721 including regular, deputationiest, contractual, re-employed, consultants and Advisor.

14. Cautionary statement

Statements in the Directors Report and Management Discussion & Analysis, describing the Companys objectives, projections and estimates, expectations, predictions etc may be "forward looking statements", within the meaning of the applicable laws and regulations. Forward looking statements contained herein are subject to certain risks and uncertainties that could cause actual results to differ materially from those reflected in the forward-looking statements.

Actual results, performances or achievement may vary materially from those expressed or implied, economic conditions, Government policies and other incidental factors such as litigation and industrial relation. Readers are cautioned not to place undue conviction on the forward-looking statements.