NEW DELHI: The Central Government has decided to bear the additional cost of Rs. 1,000 crore for providing more spectrum to the telecommunication industry to meet the growing demand for wireless phones, Telecom Secretary J. S. Sarma said here on Wednesday.

The Government will vacate state-owned spectrum facility in two to three months to accommodate the spectrum need of telecom companies. The Communications Ministry was working on the Rs. 1,000-crore project to allocate spectrum facilities in consultation with the Ministry of Defence and armed forces, Dr. Sarma said at a telecom conference organised by the Associated Chambers of Commerce and Industry of India (Assocham).

The Defence Ministry is in control of a large number of frequency bands, which, the industry says, amounts to wasteful utilisation of this scarce resource. However, Defence Ministry sources point out that their wireless equipment are sourced from a number of countries and their conversion to certain common frequencies will cost a lot of money.

It has, therefore, asked the industry or the Government to bear the cost for re-tuning the equipment to other frequencies. The issue has been hanging fire since the late 1990s and could not be resolved so far.

Dr. Sarma hoped that the deadlock on spectrum allocation would be resolved as the Defence Ministry had in principle agreed to vacate the spectrum. Admitting that the shortage of spectrum had generated a lot of controversy in the telecom sector for quite some time between CDMA and GSM operators, he said that now with the joint initiative of the Defence and Telecommunication ministries, the issue would be settled shortly for good.

The Secretary asked the industry to prepare a paper listing its areas of concern and priorities so that a second telecom revolution could be ushered in as early as possible.

Dr. Sarma said the Ministry favoured certain tax incentives for the telecom sector and it had sent its recommendations to the Ministry of Finance.

PTI reports:

Dr. Sarma said BSNL would be the executing agency and the spectrum released would be allocated to operators for offering both 2G (existing mobile services) and 3G (next generation mobile services) services.

Asked whether this was part of the Department of Telecommuniction's long-term plan to get spectrum vacated from defence services for which a high-power Group of Ministers under Defence Minister Pranab Mukharjee has been formed, Dr. Sarma said this was just an alternative strategy to meet the immediate demand.

GoM was, however, yet to conduct its first meeting on this issue.

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