Power Grid Corporation of India Limited, a state-owned power and telecom service provider has acquired a Unified License from the Department of Telecom, it informed the BSE yesterday. The Unified License will allow Power Grid to offer telecom and Internet services. The government-owned company didn’t clarify on how it plans to us this license: to launch telecom services publicly (for which it will need spectrum), to launch Internet services, or to set a private telecom infrastructure in-house. Or maybe it’s thinking about broadband over powerline all over again, almost 10 years after it first considered it…
Remember that back in 2008, Power Grid Corp had talked about plans to bring Internet Internet to consumers, although these plans never materialized. The 2008 plan included a full-fledged consumer Internet, Cable TV service starting with metro cities as well as entry into Entertainment, mobile towers, and the Data Centre segment. It had claimed to be in discussion with an unnamed venture for the entertainment segment, at that time.
From the filing in 2008:
– POWERGRID is also looking forward to getting into Entertainment Business, Tower Business, Data Centre Business, Gigabit Knowledge network etc.
– Discussion under progress for a Joint Venture (JV) with one of the state and a private player to launch entertainment services.
– Discussion also under progress for entering in to an Agreement with consortium of Cable Operators to provide Television services / internet services and other related entertainment services in Metropolis.
– Upon successful venturing into these new business areas, POWERGRID’s Telecom revenue is expected to rise to Rs 500 Crores per annum in next two to three years.
Source: Power Grid’s BSE filing in 2008.
Power Grid has optical fibre, default right of way
On the other hand, this could have something to do with the Niti Ayog three year plan, which points towards using the power infrastructure for Internet access:
In the second Phase of the Bharat Net, which is to be completed by December 2018, all 2.5 Lakh Gram Panchayats are to be provided fibre optic connectivity. During this phase, underground fibre, fibre over power lines, radio and satellite media are to be optimally mixed. In this phase, use will be also be made of the electric pole network on which electric power lines are mounted.
Source: Niti Ayog’s Action Plan for 2017-18 to 2019-20 , Pg 84
Power Grid Corp currently has power grid systems spanning over 1 million Kms. Out of this, the department has 39,662 Kms of optical fibre lines installed. Currently, it claims to have 595 Point of Presence or Internet access points across metro cities and major towns. Power Grid Corp mainly uses this infrastructure to provide B2B services like leased line Internet to enterprise customers. But this is changing, and it seems like the government entity might look at launching telecom services to consumers, as the broadband sector is slowly heating up.
Note that, Power Grid Corp uses optical ground wire (OPGW) system for its fibre optic lines, which is cheaper when compared to underground wires. Its OPWG-based fibre cables span more than 26,000 Kms while additionally having more than 10,000 kms of underground optical cables as well. This report compiled by Redinet, an IT infrastructure provider, points out that OPGW cables are simply attached to power lines and is cheaper since it does not require any ground excavation.
As pointed out by this tele.net report, Power Grid Corp has default Right-of-Way grants in some areas including forest areas and it’s easier for the state-owned entity to acquire a RoW grant when compared to private companies. An RoW grant allows a telecom company to use a land temporality for laying down fibre or for erecting mobile towers. The DoT had recently upgraded RoW grants for telcos, by creating two separate state and central authorities who will look at RoW application submitted by telcos (More on this here), so this really shouldn’t be a significant differentiator for Power Grid anymore.
On the other hand, here is how the current industry stacks up against Power Grid Corp in terms of fiber broadband::
-Idea has 133,800 kms of fibre cables, although it uses it for optimising cellular traffic.
-Airtel’s has a fibre capacity of 550,000 kms, and has 2 million fibeer broadband subscribers.
-Reliance Jio is a part of an 8,100 km international submarine cable system and also has a fibre line sharing arrangement with RCOM in some circles. It’s fiber services are yet to go live.
-Vodafone claims to have more than 140,000 kms of fibre cables; it also acquired YOU broadband which claims to have around 3,000 km of optic fiber cables, and 6,000 km of last mile cables.
-There is also the government-owned BharatNet project which is currently has a presence in 80,000 gram panchayats. The Power Grid Corp is also a part of the BharatNet.