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Cabinet approves 50% cut in CDMA spectrum base price

17 Jan 2013 Evaluate

The Union Cabinet approved a 50 per cent reduction in the reserve price of CDMA spectrum for the auction to be scheduled in March. In the previous auction, reserve price for CDMA spectrum was 11 times higher than the amount telecom operators paid in 2008, which did not attract bidders due to high reserve price. The decision follows a recommendation by the Empowered Group of Ministers (EGoM) which suggested a 50 per cent cut in the reserve price of 800 MHz band.

Earlier, the EGoM on January 7 finalized the schedule for auction of unsold GSM spectrum for the first round along with 900 MHz spectrum and 800 MHz band airwaves used for offering CDMA-based mobile services. Further, the Cabinet had already approved a 30 percent cut in the reserve price of 1,800 MHz band spectrum used for offering GSM services.

Due to high reserve price about 70 percent of the airwaves went unsold in November auction that raised only Rs 9,410 crore, which was less than 25 percent of the amount the government was targeting to raise from spectrum sale for this fiscal. With the government reducing the CDMA spectrum price by 50 per cent then the auction of 800 MHz together with 900 MHz and 1800 MHz airwaves would get up to Rs 45,000 crore at the base price.

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