Defence, DoT lock horns over spectrum fee

Tensions have arisen between the defence services and the Department of Telecom (DoT), with the former not inclined to pay Rs 5,000 crore a year as user charges for wireless spectrum.

Defence officials contend that the services do not use spectrum for "commercial purposes" and therefore do not need to pay for it.

They also have differences with the DoT proposal seeking that the three services "" army, air force and navy "" pay annual rentals and maintenance charges for the secure, high-bandwidth optical fibre network, being built by Bharat Sanchar Nigam Ltd for their exclusive use.

Once built, the defence services will migrate large parts of their wireless communication platform to this network and release large chunks of spectrum to mobile service providers who are demanding more spectrum in response to rapidly-growing subscriber numbers and the need to introduce third-generation (3G) services that require high-speed internet access. Around 40 MHz of spectrum will be released as a result of this switch-over.

Monthly mobile subscriptions are growing at 7 million against 3 million and are expected to grow to 10 million by the end of the year. The DoT currently has six applications pending for additional spectrum requirements.

In June 2004, the government had stipulated that all central government users would have to pay for the spectrum being used by them in order to ensure optimal and efficient usage of this scarce national resource.

Defence officials also say the demands (usage charges, annual rentals and maintenance charges) are untenable and exorbitant. Officials feel that setting up their own fibre-optic network would perhaps be much cheaper.

That process would take a few years and till then the forces would not be able to release any spectrum "" something that would jeopardise the country's ambitious mobile telephony roll-out and exacerbate the spectrum crunch.

On its part, the DoT has also complained that the defence services are demanding more money to make the switch. While the earlier amount was just under Rs 1,000 crore, the ministry of defence has now held that it requires over Rs 4,000 crore for the switch-over.

In a letter written to Defence Minister AK Antony a few days ago, Communications Minister D Raja also complained about the defence services escalating their requirement of spectrum by over ten times. In many cases, the letter claims, the projected replacement capacity is over 1,000 times the capacity of their existing wireless link.