BSNL: Optical fibre network for defence forces difficult

Vacation of spectrum by the defence forces is likely to be delayed, as BSNL, which has been given the mandate to lay an alternate optical fibre network, is finding it difficult to undertake the project because of the sharp escalation in costs.

This would be a setback to the telecom ministry, as it has told operators that additional spectrum would be given by way of auction, after it was vacated by defence forces.

The Rs 9,175-crore project cost is likely to be higher by more than Rs 4,000 crore, BSNL has informed the government and expressed concerns about implementing it. The whole project cost will be borne by the government.

The project could help the ailing PSU to tide over its losses as 7.5 per cent of the total project cost would go its coffers. So far, no work has started on the project.

The matter has been referred to an inter-ministerial group (IMG). BSNL had made a presentation to the group yesterday, saying that the additional conditions put up by the defence authorities have escalated the cost. Unless the IMG takes a decision on the matter, BSNL will not be able to go-ahead with the project.

The Department of Telecom munications (DoT) and the defence ministry had signed a memorandum of understanding in 2009, according to which the armed forces were to vacate 25 MHz for 3G and 20 MHz for 2G spectrum. DoT was to set up exclusive and dedicated network for defence.

This will happen in a phased manner and will be linked to the completion of the alternative network that the DoT is building for the defence forces.

While the armed forces have already freed up 15 MHz 3G spectrum, which was sold during last year's auctions, and also vacated 15 MHz 2G spectrum, which has been allocated to new operators, the remaining airwaves - 10 MHz spectrum in 3G (for two operators) and 5MHz in 2G - will be released only after the alternative optic fibre network being built by BSNL is completed.

The Cabinet Committee on Infrastructure had approved a budget of Rs 9,175.16 crore in December, 2009 for Defence network for the release of spectrum. This includes Rs 1,077 crore for Air Force network and Rs 8,098 crore for Army and Navy Network.

The network includes 60,000 kms of exclusive and dedicated OFC. Two tenders were issued by BSNL in January 2010. Both were subsequently cancelled due to stringent eligibility conditions.

The cost has escalated as the army now wants 48 (F) optic fibre cable in place of 24 (F). It also wants a three year warranty and want intrusion proof network.

During the signing of the MoU, no such conditions were discussed.

In total, the telecom ministry is seeking that the armed forces vacate up to 80 MHz of airwaves for commercial telephony.

The 3G and broadband spectrums jointly fetched Rs 1,06,000 crore for the government against its estimates of Rs 35,000 crore.

The defence ministry had also threatened it would not release additional airwaves for commercial use. It said that the telecom department had failed to meet all timelines on building an alternative communication network for the armed forces, and warned that it could result in the services stopping all vacation of airwaves.