The Hindu Business Line : Lower allocation for defence cable system may delay spectrum release

Funds crunch
The cable network is being planned to connect 150 key defence locations.
The Telecom Department may have to find the funds to complete the project.
Defence forces say it will not release more spectrum until the project is completed.

Thomas K. Thomas

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New Delhi, March 2 In a move that could further delay vacation of radio frequency by the Defence forces, the Finance Ministry has made an allocation of only Rs 152 crore for setting up an optical fibre cable network for the armed forces.

The project being undertaken by the Department of Telecom is aimed at providing the Defence forces an alternative communication medium and is estimated to cost over Rs 1,000 crore in the first phase.

While the Budgetary allocation during 2008-09 for this project is higher than the previous year (Rs 95 crore), it is no where near the cost of the total project. The Defence forces have made it clear that they will not be in a position to release more spectrum for use by mobile operators until the cable network is completed. The cable is being planned to connect 150 key defence locations.

Air Force network

While the network for the Air Force was expected to be completed by December 2007, DoT is negotiating with the Army and Navy on laying a separate cable system for them. It has been estimated that the total cost of the project for all the three divisions of the forces could cost nearly Rs 5,000 crore.

However, lack of adequate funds could delay completion of this project which means that mobile operators, especially those who have received the licences recently, may have to wait longer to get spectrum released.

The Finance Ministry had earlier suggested that the DoT could auction spectrum and the money collected from the bidding could be used to fund the cable project for the Defence forces. However, the DoT shot down the proposal on the grounds that auction may not be practical. DoT has proposed an alternative scheme for increasing the revenue collection by imposing a higher spectrum charge on mobile operators.

Licence fee

As per the Budget estimates, the Government has received over Rs 21,000 crore from licence fee and other charges from telecom operators in 2007-08. It is expected that in 2008-09 the telecom companies would contribute Rs 13,000 crore in the form of various charges.

With the Finance Ministry allocating only Rs 152 crore for the OFC project, it will be now up to DoT to find funds to complete the cable network for the armed forces. Meanwhile, 5 new operators, who recently received licences, are awaiting spectrum for rolling out services.

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