With the department of telecommunications working to meet conditions set by the defence ministry, telecom firms could soon have access to more pan-India 3G spectrum. The defence ministry is likely to shortly vacate 15 MHz of spectrum in the 2.1 GHz (3G band), sources said, paving the way for auctions that should fetch the government at least R30,000 crore. With more 3G spectrum at their disposal telcos can offer better data services.

According to an internal note, drafted on November 11, and based on a meeting between the DoT and the defence ministry, the telecom department has agreed to the creation of a defence band. A steering committee, under the DoT secretary with members from the defence forces, will oversee this. The idea is for the armed forces to get 15 MHz of spectrum in the 1900 MHz band in lieu of 15 MHz in 2.1 GHz band; this did not form part of the earlier memorandum of understanding signed between them and telecom department in May 2009.

The May 2009 MoU said the defence ministry was to vacate 40 MHz of spectrum in the 1800 MHz (2G) band and 25 MHz in the 3G band in return for which the DoT was required to roll out an exclusive fibre network for the defence forces, a swap called network for spectrum (NFS). The spectrum was to be vacated by the defence ministry as per specific targets met by the DoT, which included milestones in the roll-out of the NFS network, notification of the defence band, promulgation of a defence interest zone and waiver of spectrum charges for defence.

For its part, the defence ministry has vacated 20 MHz in the 2G band and 20 MHz in the 3G band despite the targets being missed. However, it is not willing to vacate any more spectrum unless the the MoU triggers are met.

With recent meetings and negotiations the Dot and defence ministry are in the process of working out a fresh arrangement that the DoT can execute quickly. The development is significant because this swap spectrum proposal is not part of the original MoU and the two sides have got an opportunity to bridge the trust deficit created earlier because of the non-fulfilment of the MoU conditions.

The result of this fresh initiative would lead to the release of 15 MHz 3G spectrum (the same quantum of spectrum was auctioned by the government in 2010) a good option for facilitating data play. The possibility of spectrum in the 1800 MHz being utilised for the purpose is not possible because due to the non-fulfilment of the MoU triggers, the airwaves are not contiguous in this band. Since licences of different operators would come up for renewal in different years, the 900 MHz band too cannot be made available to all around this time. The 700 MHz band, which supports data, is constrained by the lack of a developed ecosystem and absence of synergies with the developed markets of the US, UK, Europe and China. To develop the ecosystem here would take at least three to four years, as is the case with spectrum in the 2.3 GHz band, which broadband wireless access operators currently have.

The option of releasing more 3G spectrum through sharing or trading by the government is also not possible. While sharing has been completely ruled out at this stage by the DoT, the in-principle nod to trading would not release much spectrum because operators have only a small chunk of 5 MHz and they need to meet their respective roll-out obligations as well.