May stop vacation of spectrum, Antony warns FinMin

The defence ministry has said it will not release more telecom spectrum for civilian use as finance and telecom ministries have not kept their end of the bargain.

Defence Minister A K Antony has made this clear to Finance Minister Pranab Mukherjee.

A memorandum of understanding (MoU) between the defence and telecom ministries for vacation of spectrum was signed two years ago.

The spectrum was for 2G and 3G services. If this happens, it will aggravate the current spectrum scarcity. Anthony said fulfilling the terms was essential not only to establish the credibility of the MoU but also to ensure future release of spectrum by the defence forces.

Under the MoU, the defence ministry had agreed to vacate 25 MHz spectrum in the 3G band and 20 MHz in the 2G band in phases. In return, the Department of Telecommunications (DoT) had committed to set up an exclusive defence band and defence interest zone for the armed forces. DoT was to also commission an optic fibre cable (OFC) network at a cost of Rs 10,000 crore, to be built by Bharat Sanchar Nigam Ltd, for the defence services. Also, the finance ministry was to waive the spectrum fee of around Rs 10,000 crore payable by the defence ministry.

The defence ministry has already vacated 15 MHz 3G spectrum. It was auctioned last year and earned the government huge revenues. It has also vacated 15 MHz 2G spectrum, which has been allocated to new operators. Under the agreement, the remaining spectrum — 10 MHz spectrum in 3G (for two operators) and 5MHz in 2G — is be vacated only after the OFC network is complete.

This was slated for 2012.

However, Antony told Mukherjee that DoT had not met a single commitment even after the matter was taken to a monitoring committee chaired by the cabinet secretary.

Anthony has said that there is disquiet in the ministry on the fact that there have been delays by DoT in laying the OFC network and in notifying the defence band and the defence interest zone. Also, the finance ministry had not waived the Rs 10,000 crore spectrum charge, despite the issue having been taken up on several occasions, he said.