Amid sharp differences between the Ministries of Defence and Telecom over vacation of 3G spectrum by the former, the matter has been sent to an Empowered Group of Ministers headed by Finance Minister Pranab Mukherjee.

A memorandum of understanding (MoU) between the Defence and Telecom Ministries for vacation of spectrum was signed two years ago and both the Ministries were supposed to achieve certain milestones in a time-bound manner.

This was approved by the high-level monitoring committee.

“The Cabinet Secretary has desired that this issue may now be placed before EGoM since there are areas of disagreement despite decisions of the High Level Monitoring Committee,” a Cabinet Secretariat communication to the Department of Telecom said.

As per the MoU, the Defence Ministry had agreed to vacate 25 MHz of 3G spectrum and 20 MHz of 2G in phases. In return, the DoT had committed to set up an exclusive defence band and defence interest zone for the armed forces.

The DoT was to also commission an optic fibre cable network at a cost of Rs. 10,000 crore, to be built by Bharat Sanchar Nigam Limited, 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, however, vacated only 15 MHz of 3G spectrum which was auctioned last year and the government earned huge revenues. It had also vacated 15 MHz of 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 completed.

Recently, the Defence Ministry had refused to release more spectrum for civilian use as the finance and telecom ministries have not kept their end of the bargain.

Defence Minister A.K. Antony had made this clear to the Finance Minister.

“This is a matter of grave concern. There is also disquiet among the services on account of delays by the Ministry of Communications and IT in laying the optical fibre cable project for defence networks in notifying the defence band and the defence interest zone and the Ministry of Finance in waiving the usage charges,” Antony had written to the Finance Ministry in a letter dated February 25, 2011.

The letter had further said that both the Ministry of Communications and the Ministry of Finance need to expeditiously take steps to ensure the fulfilment of their commitments and achieving of the milestone as agreed to under the MoU.

It is understood that DoT has forwarded to the Finance Ministry a proposal for waiver of spectrum charges for usage by the defence forces, the letter added.

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