The Telecom Ministry is likely to approach the Cabinet with a proposal to waive off spectrum charges of about Rs 1.20 lakh crore for the airwaves used by the Ministry of Defence (MoD).
According to sources, a draft Note has been prepared by the Department of Telecommunications (DoT), seeking Cabinet approval "for waiver of spectrum charges for usage by Defence in bands other than 2G/3G bands amounting to Rs 1,18,666.59 crore for the period June 1, 2004 to May 31, 2011 for pan-India usage."
It has also sought waiver of spectrum charges for usage of airwaves in 2G and 3G bands amounting to Rs 1,124.69 crore, of which Rs 937.24 crore (for period from June 6, 2004 to July 31, 2009) has already been waived off by the Ministry of Finance, while Rs 187.45 crore for the subsequent period from August 1, 2009 to July 31, 2010 remains.
The slugfest between the telecom and defence ministries had started when DoT dismissed the MoD's demand for waiving off spectrum charges. MoD objected to the levy of charges, saying that its usage is not for commercial purpose but for national security.
However, DoT had said that since other state units like the police, paramilitary including BSF and CRPF pay spectrum usage charges, the armed forces should not be exempted.
Later, DoT initiated discussions to waive off spectrum usage charges by defence forces based on the understanding that defence will vacate spectrum in phases.
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According to a Memorandum of Understanding (MoU) signed between the two parties in 2009, MoD had agreed to vacate 25 MHz of 3G spectrum and 20 MHz of 2G in phases.
In return, DoT had committed to set up an exclusive defence band and defence interest zone for the armed forces. 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 Ltd, for the defence services.