Jio shares the Rs 211 crore Indian Railways’ CUG order with Airtel this year

Telecom giants Reliance Jio and Bharti Airtel will provide new mobile connections to 1.1 million employees of Indian Railways across the country, after the two emerged as lowest bidders in the national transporter’s expansion of the closed user group (CUG) scheme, Business Standard has learnt.

According to official documents, Jio will provide 728,000 SIM cards for a contract value of Rs 126 crore, while Airtel will supply 485,000 sim cards for Rs 84 crore. Airtel had emerged as the second-lowest bidder for the order, and got the contract after matching the bid of Jio, which was the lowest bidder.

Last year, the Indian Railways undertook a significant expansion of its CUG scheme, bringing more than 800,000 additional railway employees under its ambit. Earlier, Jio was the sole service provider for the national transporter, with connections provided for 322,000 employees, according to sources in the railways.

“With increasing public investment in railway infrastructure, it was felt that more efficiency can be brought in railway operations by ensuring that every employee has a CUG connection, which can significantly reduce communication delays in crucial operations,” a senior official told Business Standard.

“The enlarged CUG scheme managed by NWR (North Western Railway) shall come into effect from 13.04.2023 and shall replace the existing CUG scheme managed by RailTel Corporation of India,” a letter issued by the Railway Board on April 12 said.

These connections have been divided into four separate plans, which will be allocated within railways on the basis of the grade of officials. Most of these new phone numbers will be allocated under ‘Plan C’, which is for Group C staff of the railways.

Due to the expansion in size of subscribers, the tariffs finalised under the latest policy are about 10 per cent lower than the previous rates charged by Jio, which will lead to savings per user for the railways.

Questions to both Jio and Airtel remained unanswered till the time of publishing of this report.

Another benefit that the railways sees is increased connectivity in areas with typically poor network quality. “Since the new CUG connections will be provided to every employee in the country, operators have an incentive to establish telecom infrastructure in places usually ignored, since railway establishments cover even remote areas and hinterlands. This is likely to lead to better network connectivity for the common people in these areas as well,” said the official quoted above.

This paper had reported that the railways allowed private telcos to install towers on railway land, which is now likely to incentivise firms to establish this infrastructure near tracks and other establishments to meet their quality of service (QoS) commitments under the tender conditions.

The CUG scheme was started in 2002 to provide better communication facilities to officials at various operational levels. Since then, the scheme has been gradually expanded to increase the ambit of railway employees availing of special rate benefits and faster communication. Business Standard