While the government hopes to get reasonable sums from the forthcoming 2G auctions, the biggest problem it faces is the lack of contiguous spectrum blocks, vital if firms are to be able to offer, for instance, data services in the 1800MHz spectrum band. And the reason why such spectrum is not available is the fact that as of today, you have defence forces sitting on spectrum that is meant for commercial uses and commercial users using defence spectrum.
The genesis of the problem goes back many years, but in 2009, an MoU was signed between the defence and telecom ministries which would result in the defence forces vacating 150 MHz of spectrum for commercial use—to start with, 40MHz was to be released in the 2G band and spectrum and 25MHz in the 3G band provided the telecom ministry created a dedicated optic fibre network for the defence forces. Various milestones were put down for the defence releasing spectrum based on the stages of completion of the network. The problem, as with most things involving PSUs like BSNL, the network got tangled in all manner of problems and, 4 years later, even the orders for the equipment have not been placed. While the telecom ministry keeps assuring the defence ministry that the network is being rolled out, the defence ministry’s argument has been that it has already released a lot more spectrum than it was supposed to—20 MHz in the 2G band and 20MHz in the 3G band. In the event of the defence ministry not vacating the spectrum it holds in the 1800MHz band, the telecom ministry cannot reorganise the spectrum there into contiguous chunks of 5MHz each, making this worth a lot less in the auctions. Ironically, what is also stuck in the mess is 15MHz of 3G spectrum which can fetch good money in the auctions—from 1900-1907.5 MHz and 1980-1987.5MHz—considering telecom companies are looking for spectrum to meet their data needs. While this spectrum is not part of the telecom-defence pact and can easily be vacated, the telecom ministry needs to convince the defence ministry of its bona