The Telegraph
Since 1st March, 1999
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Stage set for new lord of the rings

New Delhi, Dec. 4: GAIL (India) Ltd, Power Grid Corporation of India and RailTel will jointly float a company that will offer national and international long-distance telecom services from the middle of next year.

Prime Minister Manmohan Singh recently held a meeting with the chiefs of the three public sector units to discuss the project.

“We had made presentations to the Prime Minister about the project and he was not only appreciative but also encouraged us to launch it soon. Our presentation highlighted the ability of the network to reach remote parts of the country and cover rural areas,” said a senior officer of working on the plan.

“The new company, likely to be named Triveni Telecom, is expected to be registered by April. We hope to finalise the equity and revenue share before February, secure licences and start services by the middle of next year,” the officer said.

The three PSUs will synergise their telecom operations by pooling in infrastructure to provide broadband services extensively. They also plan to venture into other telecom services.

The consortium hopes to expand its network at a faster pace before services are launched. The new company could straddle the entire stretch from Jammu and Kashmir to Kanyakumari, including the Northeast. It is planning a network of 400,000 kms. This would surpass that of Bharat Sanchar Nigam Limited.

Early this year, the three companies had signed a memorandum of understanding to form a consortium for jointly offering bandwidth for e-entertainment, e-education and e-medicine.

GAIL owns more than 13,000 km of optic fibre cable network, PowerGrid has laid about 19,000 km of cables linking 60 cities and RailTel has networked 2,200 towns with a 27500-km cable network running along railway tracks.

“Initially, we had planned to focus on the entertainment sector, but we have identified a few more potential areas that would not only provide a good business but also support to various government initiatives,” RailTel sources said.

It would also explore market opportunities in broadband, managed services and virtual private networks in corporate houses. The consortium is targeting revenues of over Rs 1,000 crore by 2008.

At present, RailTel leads the pack with revenues of Rs 100 crore from its telecom ventures. It is followed by PowerGrid with Rs 85 crore and GAILTEL with Rs 40-50 crore .

Industry sources said the disparity in revenue would help forge a strong alliance but it could also work against the spirit since individually the three companies would like to have larger reach. “This is vital as they would be able to bargain for a higher equity in the venture,” sources said.

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