The optical fibre network to be set up by state-run Bharat Sanchar Nigam Ltd (BSNL) for the defence forces in return for their vacating telecom spectrum might get delayed.
The department of telecommunications (DoT) has set up a committee to look into the issue of escalating cost for the project. The process may also delay the vacation of spectrum by the armed forces.
The Cabinet had already approved Rs 9,175 crore for setting up the OFC network, but BSNL has said the cost would be about Rs 4,000-5,000 crore higher. A committee has been set up with officials from DoT and the ministry of defence to ascertain the cost escalation, a senior telecom official told Business Standard. Its report is expected in two to three weeks. If there are valid reasons for the rise in costs, Cabinet approval would be sought, the official added.
The OFC project has already been re-tendered once because of a change in specifications desired by the defence forces. Eight companies had bid in September last year but the project has not been awarded.
Some differences had come up between DoT and the defence ministry over the OFC network. The latter has vacated 15 MHz of third-generation (3G) spectrum, auctioned last year. It has also vacated 15 MHz of second-generation (2G) spectrum, which has been allocated to new operators. Under the agreement, the remaining spectrum — 10 MHz in 3G (for two operators) and 5MHz in 2G — would be vacated in a phased manner, linked to completion of the OFC network.
In the past, the defence ministry had pointed to delay by DoT in laying the OFC network and in notifying the defence band and the defence interest zone. Also, the finance ministry had not waived the Rs 10,000-crore spectrum charges.
DoT has already referred the matter of vacation of spectrum to an empowered Group of ministers (eGoM) because of the differences between it and various other departments including information and broadcasting, defence and space. It has also asked for additional vacation of 80MHz of spectrum from the defence services. It has said that 150 MHz of spectrum in the 1700-2000 Mhz band for commercial use may not be sufficient to meet the requirements of 2G and 3G services.