The proposed modernisation of defence signalling equipment, the universal licensing and other such measures were likely to change the face of the telecom sector in the next two years, Arun Shourie, Union minister for telecommunications and divestment, said on Tuesday.

The defence signalling equipment currently took up a large chunk of the satellite spectrum, Shourie told reporters in Panaji.

On completion, the Rs 1,400 crore (Rs 14 billion) project to "modernise" the signalling equipment would give the telecom companies a much larger part of the spectrum, which would change the face of the industry, he said.

Dismissing the allegation that the government was using Bharat Sanchar Nigam Ltd to retain its monopoly over the telecom industry, Shourie said while there was no attempt to monopolise the market, BSNL was likely to have an upper hand over its competitors through its futuristic services like broadband on fixed line.

"Today we have 47 lakh (4.7 million) subscribers, and are the second largest operator in the country. It is the reduced rates of BSNL that have forced other operators to bring down their rates as well."

The government had in fact given up its monopoly in the sector by scrapping licence for basic operators, he said.