The Hindu Business Line : DoT seeks Rs 9,970 cr for Defence network project

New Delhi, July 1 The Department of Telecom has approached the Cabinet Committee on Economic Affairs seeking Rs 9,970 crore for laying an optical fibre cable network for the armed forces in return for vacating spectrum.

Of this Rs 1,077 crore is for the Air Force network and the balance Rs 8,893 crore is for connecting the various establishments of the Army and the Navy.

The network, being set up by BSNL for the Defence forces, is part of a Memorandum of Understanding signed by the Ministries of Communications and Defence.

Once the network is completed, the Defence establishment will release 45 Mhz of spectrum in phases that will allow mobile operators to add another 100 million subscribers.

DoT’s estimate

According to the DoT’s estimate, the Government will stand to get revenues of about Rs 6,500 crore every year once the additional subscribers are added by mobile operators.

“Even with the assumption of average revenue per user of Rs 3,000 per annum, the additional revenue for telecom operators will be around Rs 3,000 crore. The government revenues (3 per cent spectrum charge, 6 per cent licence fee and 12 per cent service tax) from these connections will be about Rs 6,500 crore per annum. Further, it is estimated that the government could get an upfront revenue of Rs 20,000 crore by way of auctioning of 25 Mhz of spectrum being vacated by defence services for 3G services,” the DoT said in a note to the CCEA.

Network congestion

The DoT has, however, said that revenue for the Government is not the only consideration for the project. “The congestion of mobile network is increasing at a rapid rate. This is already resulting in jamming of networks, call drops and poor voice quality. The benchmarks prescribed by the regulator are not being met by most of the operators. One of the contributing factors is inadequacy of spectrum in metropolitan areas and main cities. Therefore, there is a strong need to vacate the spectrum being used by defence forces in a time-bound manner,” the DoT said.

Related Stories:
DoT, Defence Ministry bury the hatchet on spectrum vacation
Defence sets new terms for vacating spectrum
Panel to identify unused spectrum with Defence

More Stories on : Security | Telecommunications

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