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March 15, 2010
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Both the mining and construction industries are key contributors to the Indian economy. The mining sector, in particular, meets the requirements of a wide range of important industries such as construction, engineering and electronics.

Both sectors witnessed considerable growth until 2008-09, when the global economic downturn led to a relative slowdown.However, since the last quarter of 2009, both sectors have shown signs of recovery.

India produces 85 minerals and four fuels. Of the minerals there are 11 metallic minerals, 52 non-metallic minerals and 22 minor minerals. The sector is dominated by public sector entities, which account for about 67 per cent of the total production. Private participation is low.

In 2008-09, production of minerals was adversely impacted by the downturn.Production of metallic minerals during 2008-09 was 245.87 million tonnes (excluding gold), an increase of about 3 per cent over 2007-08. A slowdown was evident since production in 2007-08 grew at 12 per cent over 2006-07. Metal prices declined as a result of lower demand despite cutbacks in production. Also, the total value of non-metallic minerals produced declined from Rs 34.45 billion in 2007-08 to Rs 32.60 billion in 2008-09.However, production improved during April-November 2009 compared to AprilNovember 2008 for minerals such as aluminium, copper, lead and zinc, indicating signs of recovery.

The construction space has witnessed a similar trend. During 2008-09, the contribution of this sector to the GDP at factor cost was 6.82 per cent for the third quarter, compared to 7.76 per cent and 7.48 per cent in the second and first quarters respectively. The last quarter of 2008-09 showed signs of revival, with the construction industry's share rising to 7.06 per cent.

Prior to this, owing to the huge scale of the projects undertaken, the sectors had started inducting the latest developments in IT and telecom into day-to-day activities. Since these companies often had to contend with huge volumes of data and information that outlined the individual project status and material requirements, they started computerising processes such as project design, development, implementation and monitoring. They also deployed wide area network (WAN)-based systems for monitoring and controlling projects across dispersed centres.

Connectivity, clearly, has become a key priority. Mining and construction companies need to establish connectivity between their head office and branch offices, and project worksites, in order to supervise the project from a distance, retrieve data and collect machine usage data as well as to ensure on-site qualitative control of the project.

In addition, connectivity helps the employees to function as extended arms of the enterprise, which, in turn, helps the company to reduce its capital and operating expenditure by managing its needs on a remote network. The crux lies in integrating the branch offices of a company into a cohesive enterprise network, streamlining systems and providing secure connectivity.

To achieve this, several technologies have been deployed. Leased lines and multiprotocol label switching (MPLS) have been widely used, primarily for connecting to the internet and as back-up. Similarly, digital loop carrier (NLD) is a medium for interbranch connectivity and very small aperature terminals (VSATs) have been effective in establishing and maintaining contact with project sites at remote locations. This medium has also provided communication tools such as email, internet access, voicemail, video conferencing and real-time video inspection. For connecting to the internet, companies in these spaces mostly use digital subscriber line (DSL), optic fibre and Wi-Fi networks.

Companies in these segments have also made use of a wide range of mobile and enterprise applications such as audio and video conferencing, instant messaging, mobile email and mobile data connectivity.

To access applications such as email, corporate intranet, etc. on the go, companies in these verticals have increasingly equipped their mobile workforce with BlackBerry smartphones, thus enhancing efficiency and streamlining the flow of information from the field to the head office.

Apart from telecommunications, several other tools and solutions such as enterprise resource planning (ERP) and the Citrix Presentation Server software have become popular. ERP systems have helped the companies automate and link all processes and combine data from separate applications, thereby synchronising the flow of data and information across various systems. Similarly, the Citrix Presentation Server software has optimised the available bandwidth, enabling employees to experience faster application performance for improved productivity.

Given the highly competitive environment and complex market dynamics in the mining and construction sectors, these companies are expected to increasingly turn to IT and telecom to enhance their productivity and stay ahead of the competition.

tele.net conducted a survey among 10 mining and construction companies to assess their telecom needs and solutions.The respondents were questioned about their telecom-related requirements, the main concerns regarding the telecom services provided to them and the kinds of application being utilised.

The following questions were asked in the survey:

  • What are the company's key technology requirements?
  • What mix of service providers and vendors are used?
  • What are the biggest concerns with respect to telecom infrastructure?
  • What are some of the software and enterprise applications implemented by the organisation?
  • Which network security tools has the organisation implemented?
  • What redundancy tools are being utilised by the company?
  • Which new product or service holds the most interest or relevance for the organisation?

  • Key technology requirements

    The survey results suggest that connectivity is a key priority for companies in the mining and construction space. This is largely owing to the fact that such companies require their central offices to be networked with several worksites in order to supervise the project remotely, in real time, with the capability of transferring images, video and data, calculating the progress of the project and providing access to the central information system of the company for retrieval of data.

    To achieve this, most players in these spaces have opted for multiple WAN and last mile access technologies. In the mining vertical, leased lines and MPLS are the most widely utilised technologies for WAN connectivity.

    Such companies are using leased lines for connecting to the internet and as backup along with core switching level redundancy and fibre redundancy.

    MPLS solutions have also been deployed either as a WAN technology or as a redundancy option.

    Players in the construction space utilise DLC (local loop) as a primary WAN technology and DLC (NLD) for interbranch connectivity.

    Also, ISDN is used for video conferencing, while VSAT connectivity is the preferred medium for connecting the construction sites in remote regions to company headquarters. International private leased circuit (IPLC) is also used for international connectivity. Other popular technologies include Ethernet, IP-VPN and MPLS.

    For last mile connectivity in mining companies, optic fibre is the preferred method, closely followed by DSL. This is primarily owing to the high bandwidth requirements of applications such as video conferencing.

    Also, wireless (primarily Wi-Fi) has witnessed strong uptake in conjunction with DSL and optic fibre. Radio frequency links are gaining a foothold in this space. These companies have set up Wi-Fi connectivity in their main as well as branch offices, and placed radio links to back up their last mile optic fibre access.

    For players in the construction space, DSL is the preferred medium of last mile connectivity, followed by optic fibre and wireless. While Wi-Fi dominates, data cards are also being used by such companies. Wireless as a medium of last mile connectivity is being used in conjunction with either DSL or optic fibre.

    Service providers and vendors

    The survey findings indicate that mining companies usually opt for a mix of service providers for WAN connectivity. Bharat Sanchar Nigam Limited (BSNL) is the most preferred service provider for domestic leased lines (local loop) and MPLS.Other key players in the leased line segment are Reliance Communications (RCOM) and Tata Communications.Bharti Airtel is the dominant service provider for internet, followed by RCOM, BSNL and Tata Communications.

    For last mile connectivity, Bharti Airtel is the preferred service provider for optic fibre, while BSNL and RCOM are also key players in this space. Bharti Airtel and BSNL are both being used for DSL services.

    List of respondents

  • Alpha G:Corp Development Private Limited, Respondent
  • Akruti Nirman, Lucknow, IT Head
  • DSC Limited, Pritam Dutt Gautam, Additional GM, ICT
  • Hindustan Construction Company, Satish Pendse, Chief Information Officer
  • Hindustan Copper, IT Executive
  • Mahagun India Private Limited, Aftab Ahmad, Manager, IT
  • Marg Limited, Respondent
  • National Aluminium Company, N.C. Sahoo, Deputy General Manager, Systems
  • Neyveli Lignite Corporation, IT Executive
  • The SRS Group, Narender Singh Vaid, Head, IT

    For construction companies, in terms of last mile connectivity, Bharti Airtel is the preferred service provider for DSL and wireless last mile access. It is also a key player in the optic fibre space. BSNL is the other important player in the last mile access space. The public sector unit's services are being used by construction companies for optic fibre, DSL and wireless last mile access.

    For WAN connectivity, Bharti Airtel is the most preferred service provider for domestic leased lines (local loop and NLD), ISDN, VSAT and the internet.BSNL is the leading player in the IPLC space as well as in the domestic (local loop) and internet segments.

    Tata Communications and Sify are used for DLC (local loop), DLC (NLD), IPLCs, ISDN and the internet, while the services of Tulip are utilised for DLC (local loop), MPLS and IP-VPN services.

    Issues and concerns

    Overall, the companies surveyed said that they were satisfied with their current networks. They did not experience any interoperability, latency, disaster recovery or capacity constraint issues.

    However, some of the organisations had a few issues and concerns and wanted improvements in their communication infrastructure. Downtime was voted as the most important network-related concern, followed by network security, latency and disaster recovery. Interestingly, none of the companies experienced capacity constraints and interoperability issues.

    Software, mobile and enterprise applications

    ERP is the most popular software application used by mining companies. According to the respondents, ERP solutions help such companies to automate and link various processes as well as combine data from several applications in order to synchronise the flow of information.

    All the companies interviewed utilise software applications such as ERP, customer relationship management (CRM), supply chain management (SCM), business intelligence and inventory management for construction-related works. Of these, ERP and CRM are used extensively, followed by inventory management systems, SCM and business intelligence.Within the organisation's offices, employees utilise instant messaging to communicate with each other, while toll-free services are used for customer care services.

    Enterprise mobile applications are extensively used by players in this space.These companies typically have employees on the move, going from one site to another for significant period of time. In light of this, mobile email and data connectivity are popular applications, while mobile conferencing is also gaining traction. The respondents also use their mobiles to access the corporate intranet.

    Other popular applications include push alerts and personal information management systems.

    Network security

    Firewalls followed by operating system (OS) security patches and proxy servers are the most preferred network security applications for mining companies.

    However, penetration testing, denial of service detection and mitigation, and virtualised unified threat management (UTM) systems have not caught on in this sector.

    The majority of the construction companies have deployed a portfolio of network security solutions including firewalls, proxy servers, UTM systems and access logs. Of these, however, only firewalls are being extensively utilised.

    Redundancy options

    Most mining companies surveyed have a robust redundancy infrastructure in place.The majority of those surveyed use a mix of telecom infrastructure such as leased lines, ISDN lines, UPS and data back-up as well as applications such as data archiving and data recovery.

    Among the construction companies, the majority use service provider diversity as their key redundancy option. Mirror servers are also being used.

    The way forward

    Respondents from both the construction and mining spaces have chalked out concrete plans with regard to their communication infrastructure.

    For example, Aftab Ahmad, manager, IT at Mahagun India says the company will implement advanced software such as Microsoft Dynamic, SAP or Oracle in the future. On the hardware front, the company has sufficient infrastructure to handle its future demands.

    Similarly, the respondent from DSC Limited, says, "We are looking forward to implementing three specific offerings. One is SAP, the second is a document management system that is currently being implemented, and the third is video conferencing, which will be utilised in the coming year. The advantage for us will be interconnection between all sites, which will allow us to have dynamic video conferencing, whether desktop based or conference room based. Also, video conferencing is a costeffective tool and helps save travel time.This tool will help us have more frequent meetings with no limits on time, which will, in turn, facilitate business."

    The SRS Group too has drawn up plans for future IT and telecom upgradation. Says Narender Singh Vaid, head, IT, "With respect to IT, we plan to use ticket kiosks in our cinemas, which will function like ATM machines. We also plan to add enterprise resource planning (ERP) solutions such as SAP and customer relationship management (CRM) to our communications infrastructure."

    Quality of service, however, continues to be an area of concern. Says Ahmad, "While we are satisfied with the services provided locally, obtaining timely support is a major concern that needs to be addressed."

    That said, companies in the mining and construction industries are clearly deriving substantial benefits from the deployment of scalable and flexible IT and telecom infrastructure, and intend to pull out all the stops to upgrade their telecom infrastructure going forward.

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