The Hindu Business Line : PowerGrid may spin off telecom business

Kolkata, Sept. 5 Power Grid Corporation of India Ltd (PGCIL) may spin off its telecom business into a subsidiary in the long run. The business is expected to break even with a turnover of approximately Rs 100-120 crore in 2007-08, two years ahead of schedule.

Though the company’s board is yet to consider the issue, sources feel that considering the huge potential in the business as well as its different business management practices, there is a distinct possibility that the telecom business may be converted into a subsidiary in the long run.

PowerGrid has created a huge overhead network of telecom highway connecting 60 cities across the country along its power transmission network.

It is also the largest backbone provider in the hilly States on North East.

The company holds National Long Distance Licence and Internet Service Provider–ISP (Category A) Licence and leases bandwidth to 41 clients, including Hutch, Aircel, Bharat Sanchar Nigam Ltd (BSNL), Idea Cellular, Infosys, National Informatics Centre and others.

Referring telecom as a potential profit churner for PGCIL in the future, sources said that hardly a fraction of the bandwidth created by the company is used till date.

Given the high growth in the telecom usage, PGCIL is expected to find more customers in near future.

Also being an overhead network PGCIL telecom network is subjected low maintenance cost.

Sources feel that the network of transmission towers put up by PowerGrid across the country may also face huge business potential from the cellular phone operators.

“The tall transmission towers may prove to be an ideal place to locate the cellular phone transmission towers in the future,” a source said.

When contacted a PGCIL official admitted that the company is aware of the business potential.

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