Telecom Minister Kapil Sibal has asked the Defence Ministry to vacate spectrum as per the MOU signed between the two and is likely to take the matter to empowered Group of Ministers for resolving this and all other outstanding issues.

Sibal has written a letter to Defence Minister A K Antony for early vacation of spectrum as the same is required for expansion of mobile telephony. "Department of Telecom (DoT) has replied to Defence Ministry and we hope that the matter would be resolved as soon as possible," senior telecom ministry officials said.

A memorandum of understanding (MoU) between the Defence and Telecom Ministries for vacation of spectrum was signed two years ago and both the Ministries were supposed to achieve certain targets in a time-bound manner.

"They have given option to take from 1700 MhZ to 2000 MhZ of spectrum (300 Mhz of spectrum). DoT has always insisted that the matter should be taken to EGoM because they (Defence) have changed the specifications of the MoU, due to which the cost of the project to provide an alternate network for the defence has gone up from around Rs 3,000 crore to Rs 7,000 crore," they said.

The Defence Ministry wants to give DoT only 150 Mhz and retain the rest 150 Mhz with them, they said adding "the DoT has asked the Defence Ministry to give DoT 230 MhZ and retain 70 MhZ in the civilian areas to operate sophisticated equipments but allot all 300 Mhz in the urban areas. This spectrum can be used for 3G services, 4G services and it is a progressive band for CDMA technology as well".

As per the MoU, the Defence Ministry had agreed to vacate 25 MHz of 3G spectrum and 20 MHz of 2G in phases. In return, the DoT had committed to set up an exclusive defence band and defence interest zone for the armed forces.

The 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 Limited, for the defence services. Also, the finance ministry was to waive the spectrum fee of around Rs 10,000 crore payable by the Defence Ministry.

The Defence Ministry, however, vacated only 15 MHz of 3G spectrum which was auctioned last year and the government earned huge revenues. It had also vacated 15 MHz of 2G spectrum, which has been allocated to new operators.

Under the agreement, the remaining spectrum - 10 MHz spectrum in 3G (for two operators) and 5MHz in 2G - is to be vacated only after the OFC network is completed. Recently, the Defence Ministry had refused to release more spectrum for civilian use as the finance and telecom ministries have not kept up their end of the bargain.