26 March 2016 09:33:51 IST

Railways on track to unlock ad revenue potential

A Delhi metro train with advertisements

Consultancy EY is helping the public sector giant realise the ₹5,000-crore opportunity

Running 12,000 passenger trains every day and ferrying some eight billion passengers every year, the Railways is an ad man’s delight, and the country’s largest transporter is on track to leveraging its reach and size.

Piloting this initiative is global consultancy EY, which has termed long-distance trains, with 90 per cent occupancy, veritable pots of gold.

The consultancy is in the process of zeroing in on trains and stations where innovative advertising, such as online and audio branding, interactive kiosks and water fountains can be used to add to the Railways’ revenues.

“In long-distance trains, you have a captive audience for many hours,” Farokh Balsara, Partner and Markets Leader, EY, told BusinessLine recently, adding that there is scope to have online ads at stations, trains and audio branding rights in stations and trains.

For instance, passengers in a long-distance train could “wake up to Tata Tea”, or a sponsor could win a station’s branding rights.

The average occupancy of all Duronto, mail and express trains over the past five years stood at around 90 per cent, show data provided by the Railways. Between April 1, 2015 and March 10, 2016, a total of 4.78 crore passengers travelled in the reserved segment, up 4.3 per cent from the previous year.

However, the biggest challenge for EY would be to get an inventory of all Railway assets — a route length of over 66,000 km; over 7,000 stations; over 61,000 coaches; 2.54 lakh wagons and 10,773 locomotives. With such a daunting task at hand, a team of 10 EY officials will be working on the project over four-six months, Balsara said.

To tap advertising revenues, estimated at ₹5,000 crore, EY will identify stations with maximum passenger footfalls and look to have interactive kiosks and water fountains. It would also look at free Wi-Fi zones set up by IT companies, which may also get the opportunity for data analyses of tastes and preferences of the millions of passengers.

However, stations where the Railways has independently tied up with various firms, such as Google, will be excluded. Also those stations that the Railways plans to modernise will be left out, as the commercialisation rights for all assets of these stations will lie with the firm that wins the right to develop and operate it.

On station branding rights, Balsara said EY is loo-king to have a brand name related to the location of the station. This will ensure that even if a sponsor changes, the Railways’ database for running trains is not hit.