The Union Cabinet is learnt to have cleared the proposal of the Department of Telecommunications (DoT) for building a Rs10,000 crore optic fibre communication network for the Defence Forces in lieu of the spectrum they vacate.
The Ministry of Defence will vacate a total of 45 MHz of spectrum, which can be further allocated to telecom companies. The Cabinet decision is significant, coming ahead of the auction for 3G (third generation) telecom spectrum, scheduled to begin on January 14, 2010. DoT can now go ahead and conduct the auction on time, putting an end to the speculation on the bidding process getting delayed further.
Sources said it is quite certain now that the 3G auction would be held this financial year.
3G auction is expected to fetch up to Rs35,000 crore for the exchequer, which will help bridge the fiscal deficit. The reserve price for pan-India 3G spectrum is at Rs3,500 crore.
It was not clear at the time of filing this report if four 3G slots would be allotted in every circle. In the pre-bid memorandum, DoT had mentioned that some circles would have to make do with just two or three slots only due to dearth of spectrum. In Rajasthan, no auction was scheduled. Many telcos had opposed this discrepancy.
Although DoT and the defence ministry had signed an MoU earlier this year on vacation of spectrum, the Forces recently said spectrum could not be vacated unless an alternate secure mode of communication was given to them. Subsequently, advisor to the Prime Minister and IT and telecom czar Sam Pitroda was roped in by the highest Authority to salvage the situation. Pitroda, along with finance minister Pranab Mukherjee and defence minister AK Antony, are learnt to have resolved the thorny issue.
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