Finance Secretary Arvind Mayaram has asked the Department of Telecom to quickly resolve all outstanding issues with the defence forces in order to get 3G spectrum vacated.

Mayaram, in a letter to the DoT, said that the Defence Ministry has indicated it was willing to give up 15 MHz of spectrum in the 2100 MHz band if the DoT fulfils its commitment under a 2009 agreement.

The Finance Ministry is keen to get this spectrum so that it can be sold in the next auction round, scheduled for February.

In June, Mayaram had written to RK Mathur, Secretary, Department of Defence, emphasising the urgency of the matter. The Defence Ministry has now put the ball in the DoT’s court.

2009 agreement

Under the agreement signed in 2009, DoT was supposed to roll out an optical fibre network for the defence forces, connecting key installations across the country. The department was also supposed to earmark an exclusive defence spectrum band.

But after five years, the DoT is yet to deliver on its promises. While the fibre network has been delayed due to issues related to tendering and procurement of cable, the spectrum band has not yet been announced due to a turf battle between officers in the DoT and the defence sector.

With the Finance Ministry pushing for a quick resolution, the DoT may announce the defence band soon and promise to finish the cable network by 2016, said a senior official in the Telecom Department.

The Finance Ministry is hoping to get ₹45,000 crore from the telecom sector in the current fiscal year. Of this, ₹18,000 crore will accrue in the form of annual licence fees and spectrum-usage charges.

Another ₹10,000 crore is expected to come from the sale of airwaves in the 1800 MHz, 800 MHz and 900 MHz bands, assuming that the winning bidders pay only 30 per cent of the bid amount up front.

The Finance Ministry is, therefore, worried that it may not be able to achieve its revenue target unless additional spectrum in the 2100 MHz band is sold.

Auction of 3G spectrum is likely to fetch at least ₹50,000 crore for 15 MHz, going by the 2010 auction price, and one-third of that — ₹17,000 crore — could come this year.