Cuckoo Paul & Arnab Mukherjee  
11/16/1999 The Economic Times Copyright (C) 1999 The Economic Times; Source: 
World Reporter (TM)

MUMBAI 15 NOVEMBER


ENRON Communications (ECI), an affiliate of the $31bn energy major Enron 
Corp, is preparing for a major push in the Indian communications sector. 
Enron will start off by forming a joint venture with the public sector Ircon 
(Indian Railway Construction Company) to enter the telecommunication 
business. Enron will provide very high capacity broad-band networks as well 
as services, followed by bandwidth trading in India, said Enron South Asia 
CEO and managing director Sanjay Bhatnagar.


Enrons joint venture with Ircon is expected to help the former use the Indian 
Railways reach for laying the fibre-optic networks. Mr Bhatnagar did not 
confirm the JV proposal nor reveal precise details but The Economic Times has 
learnt that the Ircon board has already cleared the proposal. ECI, through a 
separate subsidiary, is likely to spearhead Enrons telecom businesses in 
India.


Speaking about ECIs plans, Mr Bhatnagar said, This will be a new business for 
us in India, though we have been doing it in the US for over two years.


Enron already has 32,000 kilometres of fibre-optic broadband network in the 
US connecting 18 cities. The next-generation broadband network will 
incorporate both terrestrial components like fibre-optic cable and space 
components like satellites. While the network and the services will be rolled 
out nationally within six to eight months, Enron, the worlds largest gas and 
electricity trader, will get into bandwidth trading activity in India only 
about two years from now, Mr Bhatnagar said.


Broad-bandwidth networks will be the infrastructure of the future, he said, 
adding, Enron will use its expertise in energy trading for bandwidth trading.


The networks and services will allow applications like video-conferencing and 
video-delivery. We will target multiple customers, including ISPs and 
corporates with requirement for high bandwidth, Mr Bhatnagar added.


Bandwidth trading will allow under-utilised networks to be used to full 
capacity, as excess capacity will be sold when not needed by particular 
customers. These initiatives will also allow hosting of burgeoning Indian 
content within India, thus facilitating the domestic Internet market, as 
Internet usage becomes easier and more cost-effective, he said.


Globally, there is great synergy between pipelines and fibre optic networks 
and it makes perfect sense for Enron to tap the communications potential, 
said an energy analyst. The pipelines are used as conduits for fibre optics 
which can carry voice, data or video information, he added. Even in India, 
some utilities like the MSEB (Maharashtra State Electricity Board) and the 
Indian Railways are already using this routing. Electricity and gas 
distribution companies have a natural monopoly in the form of their pipeline 
and cabling which has the benefit of a wide reach that can be used by others.


Ircon has been known for innovation in its business and has expanded its 
international operations in the past few years. The company recently got a Rs 
525-crore order from Malaysian Railways, where the company which could not 
pay in cash paid Ircon in kind. Malaysian Railway paid MMTC in the form of 
palm oil and MMTC paid IRCON cash in India. Ircon also paid its highest ever 
dividend of 225 per cent this year to the government. The company made a 
profit of Rs 56.2 crore .