RailTel was formed in September 2000 with the objective of creating a nationwide broadband, telecom and multimedia network, and to modernise train control operation and safety system of Indian Railways.

To increase circuit efficiency, the Railways began building up its own communication systems from early 1970s based on overhead telephone lines, quad cables and microwave signalling.

In 1983, the Railway Reforms Committee decided to introduce optical fibre cable (OFC) based communications in IR to provide safety, reliability, availability and serviceability through use of a dedicated network.

The decision was also taken to create a network independent of the DoT and replace the existing microwave telecom systems (60% of which had reached end of life) with OFC.

Indian Railways commissioned the first OFC on the Churchgate–Virar line in Mumbai in 1988 for train operation and control purpose, which consisted of 60 km of network across 28 stations.