Cabinet approves slashing of CDMA base price by half

The Empowered Group of Ministers on spectrum headed by Finance Minister P.Chidambaram had asked the cabinet to take a final call on a 30-50 percent cut in the base price for airwaves in the 800 MHz band.

The new base price for CDMA airwaves will be around Rs.9,000 crore for 5 MHz of units of airwaves in the 800 MHz band on a pan-India basis.

The next round of spectrum auctions is likely to begin from March 11.

The CDMA airwaves will be sold along with GSM airwaves in the 1800 MHz and 900 MHz bands.

On payment for spectrum currently held in 800 MHz band by existing operators in all service areas where auction determined price is not available, the cabinet decided that such operators be charged at the revised reserve price with effect from Jan 1, 2013 on the applicable quantum of spectrum, till such time auction determined price becomes available. And that after the auction price became available, the earlier payment made on the basis of reserve price would be adjusted against the amount actually due.

The decisions are expected to result in further efficient utilisation of the scarce natural resource of spectrum facilitating proliferation of telecom services in the country, said an official release.

Soon after the announcement of the decision, shares of telecom companies like Reliance Communications and Tata Tele (Maharashtra) rose 2.66 percent at Rs.83.10 and 3.25 percent up at Rs.12.71.