GAIL earmarks Rs 750 cr for telecom

NEW DELHI: In its bid to firmly entrench itself in the telecom infrastructure-providing arena, GAIL India Ltd is planning to invest Rs 750 crore over a period of five years. This investment would be made to increase its current reach of 73 cities to more than 150 cities.

"We have drawn a blueprint for national gas grid. Our telecom infrastructure will compliment our efforts in this direction. We will soon be rolling out city gas distribution in 23 cities, telecom bandwidth will be provided along the gas pipelines and last mile connectivity issue will also be addressed," informed GAIL CMD, Proshanto Banerjee.

The company also proposes to create an Internet Protocol Multi Protocol Label Switching (IP-MPLS) network connecting 10 cities in the country.

GAIL is also planning to expand its network to the south and create intra-city networks through a selective build-and-buy process. The network will be expanded on a marginal cost basis along the proposed national gas grid and city gas networks.

As part of this project, GAILTEL - GAIL's telecom focused entity - will create an overall network stretching 20,000 km along trunk routes and another 20,000 kms of city networks. Since a major part of GailTel's network will be along pipelines, it would be able to provide a whole range of broadband services at a substantially lower cost than its competitors.

GailTel's sale of bandwidth has increased to Rs 20.5 crore in 2003-04 from Rs 11.71 crore in the previous fiscal, recording an increase of 75 per cent.

"Because of our core-competencies GailTel had emerged as the largest infrastructure provider in 'category two', with bandwidth sales increasing from 482 Mbps to 1230 Mbps in the same period," Banerjee added.

GAIL had appointed international consultant McKinsey, which had recommended an expansion strategy and suggested a service and network expansion model for the company.