The decision to cut the reserve or base price for pan- India spectrum in the 800 megahertz band to Rs 9,100 crore was taken by the Cabinet headed by Prime Minister Manmohan Singh.
The government, which had failed to attract any bidders at the Rs 18,200 crore base or start price at the previous auction in November, will sell airwaves in the 800 MHz band before March end, Telecom Minister Kapil Sibal said.
Sistema's local unit, Sistema Shyam TeleServices which is set to lose licence in all but one of its 22 telecom zones, was among the carriers that did not participate in the November auction, saying the price was too high.
However, the 50 per cent reduction did not satisfy CDMA operators who were hoping for a 75 per cent reduction, said Ashok Sud, Secretary General of the Association of Unified Telecom Service Providers of India, a body of CDMA operators.
The government will first sell unsold spectrum in the 1,800 MHz band used by GSM operators such as Airtel and Vodafone, in the auction beginning March 11. The price for this auction has been cut by 30 per cent over what was offered in the almost-failed November auction.
Spectrum in 800 MHz band and more efficient 900 MHz GSM band will follow after that.
"The Cabinet has approved 50 per cent reduction in 800 Mhz band (reserve) price which was fixed earlier at Rs 18,200 crore for 5 Mhz," Sibal told PTI.
With today's reduction in price, existing CDMA players will have to pay one-time fee for the spectrum they hold beyond a threshold, on the revised base price.
"It has been decided that existing CDMA operators holding spectrum beyond 2.5 Mhz will be charged at the revised reserve price, effecting from January 1, 2013, till such time as auction determined price becomes available," Telecom Secretary R Chandrashekhar told PTI. MORE
