The Hindu Business Line : GAIL to expand telecom infrastructure in south

GAIL (India) Ltd will invest Rs 75 crore in the expansion of its telecommunications infrastructure in South India. The country's largest natural gas transmission company has drawn up ambitious plans for its telecommunications business, which will be transformed into a strategic business unit in the days ahead. Subsequently, GAIL's telecom operations may be hived off as a separate company.

Stating this at a press conference held here today in connection with the Government of India's offer for sale of 8.46 crore equity shares of GAIL (India) Ltd through a 100 per cent book building process, Dr U.D. Choubey, Executive Director in-charge-of GAIL's telecom operations, said GAIL already has a 8,000 km-long optical fibre cable network which connects more than 70 cities and towns across the country - from Delhi to Hyderabad via Mumbai and Pune. Over the next one year, the connectivity would be extended to other cities in South India such as Bangalore and Chennai.

Dr Choubey said an investment of Rs 250 crore has already been made in GAIL's telecommunications infrastructure, which runs alongside its 4,600 km-long gas pipeline network — which includes the 2,800 km-long Hazira-Vijaipur-Jagdishpur pipeline. A further Rs 300 crore would be invested on GAIL's telecom infrastructure in tandem with work on the national pipeline grid.

According to Mr Choubey, GAIL's telecom backbone has a designed capacity of 160 gbps. The installed capacity is 10 gbps while the activated capacity stands at 2.5 gbps at present. Of this, 1,200 mbps capacity was being sold to around a dozen telecom services providers including VSNL, Tata Tele Services and Escotel.

"After meeting our captive requirements, we sell our surplus bandwidth to the ultimate carriers. As such, we are the carriers' carrier," he said. In 2002-03, GAIL's income from its telecom operations stood at Rs 11.6 crore. This is expected to go up to Rs 28 crore in 2003-04 and further to Rs 35 crore in 2004-05.

GAIL will shortly commission a study to prepare a roadmap and a phase-wise revenue plan for its telecom business.

Speaking on the occasion, Mr B.S. Negi, Director (Planning) of GAIL (India) Ltd, said the company was holding discussions with a view to playing a key role in Haldia Petrochemicals Ltd. Talks were also on for picking up of equity stake in other petrochemicals companies "in India as well as abroad" as well.

Mr Negi said GAIL was awaiting the Centre's nod for getting into the LPG retailing business. According to him, the present days were "opportune" for gas companies to raise money from the capital markets. "The gas sector is sensing" big potential with new finds in India and abroad", he said.

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