Budget push for defence network to free up spectrum

To speed up the vacation of additional 2G and 3G telecom spectrum, the government will likely make a Rs 5,000-crore provision in the Budget for an alternative network for defence services. The spectrum released in lieu of that would increase the availability for civilian use.

State-run telecom company BSNL, mandated to set up the alternative network by the department of telecommunications (DoT), already has Cabinet approval to spend Rs 9,175 crore. That includes Rs 1,077 crore for an Air Force network and Rs 8,098 crore for Army and Navy networks. According to officials involved in the development, the additional project cost of Rs 5,000 crore has been cleared by an inter-ministerial group and the provision will be announced in Budget 2012-13. The increase in project cost was sought by BSNL following stringent conditions by the defence forces. The Telecom Commission, the highest policy-making body of the DoT, approved Rs 5,000 crore for the cost escalation in November. The matter was then referred to an inter-ministerial group.

The DoT and the defence ministry had signed a memorandum of understanding in 2009, under which the defence forces were to vacate 25 MHz for 3G and 20 MHz for 2G spectrum. The DoT was to set up an exclusive and dedicated defence network.

The defence ministry vacated 15 MHz 3G spectrum, which was auctioned in 2010. It vacated 15 MHz 2G spectrum, which was allocated to new operators.

The remaining spectrum — 10 MHz in 3G (for two operators) and five MHz in 2G — will be vacated in phases linked to the completion of the alternative network.

A senior DoT official said after the approval for funds, the setting up of the network would take about two years. After the spectrum vacation, the government may explore another 3G spectrum auction. It had earned about Rs 1,06,000 crore from the 3G and BWA spectrum auction in 2010.

The plan is to have a 60,000-km optical fibre network.