Opinion - Editorials

Synergy in communications

THE SIGNING OF an MoU between the Railtel Corporation of India (RailTel) and Bharat Sanchar Nigam Limited (BSNL) for sharing bandwidth and other telecommunications infrastructure is a significant step in the right direction. It should add value to the services of both corporations, though this is only a first step and they will have to firm up their strategy to ensure optimum utilisation of their capacities and strengths. Basically, BSNL wants to tap the Optical Fibre Cable (OFC) network of the Railways to enhance its coverage of rural areas as well as to provide a back-up to its mobile telephony system — CellOne. Mahanagar Telephone Nigam Limited (MTNL), which operates telecom services in New Delhi and Mumbai, is likely to consider equity participation in a joint venture with RailTel. BSNL will focus on utilising the available infrastructure to improve rural connectivity. The issue that needs attention is whether there is enough in the proposed new arrangement for the Railways. It can be argued, for instance, that RailTel might have been able to negotiate a more attractive package for itself from a private sector partner rather than from the public sector BSNL. It is not clear if RailTel looked rigorously at all its options before making its choice.

Even at this stage, it is in the interest of both RailTel and BSNL to take a closer look not just at the utilisation of infrastructure, but also at the return on the investments that the Railways and its telecom wing have made in the OFC network. On the face of it, BSNL may be offering just first use and interconnect facilities to the Railways. The question is whether such a limited benefit is fair compensation for the use of RailTel's expensive OFC network. Of course, communications for the Railways will improve if the OFC is better utilised and this can have a beneficial impact on railway safety. For instance, creating a communication network along the railway OFC, on the lines of the emergency telephone services on the highways, can lead to a better system of reporting and monitoring. Such a system can help in the prevention of accidents on the track and in speeding up rescue and relief work in the event of a mishap.

At a time when the Railways and its subsidiaries are looking at increasing their revenues and raising adequate resources to take up major capital works and also get the latest in technology, RailTel must be more transparent in its joint venture proposals and ensure that it gets the best deal. Laying or extending its OFC network has a great potential not just for the Railways, but also for any communication network. In any joint venture, RailTel must be able to gain substantially so that it can enhance its presence and expand its network. RailTel, as well as the other subsidiaries of the Indian Railways, have been set up primarily to step up revenues and become profit centres. In the context of the current economic policies and the need to make the public sector sound and profitable, the Centre will have to study the issues afresh and formulate a comprehensive policy on public sector enterprises, the priorities for disinvestment, and a strategy to inject further dynamism into enterprises performing well. Instead of adding more subsidiaries or enterprises, the attempt must be to review existing units, merge allied enterprises, and let them evolve a corporate plan to survive competition and emerge as profit centres in addition to their public service role.

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