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The government has announced a 50% price cut in the reserve price for CDMA spectrum as there were no takers for the same in the proposed auction. The price of 800 mega Hertz spectrum is reduced to Rs. 9,100 crore from the earlier rate of Rs. 18, 200 crore for 5 MHz band. The announcement was made by the telecom minister Mr. Kapil Sibal.
The move to reduce the spectrum rates was recommended by the empowered group of ministers which was later approved by the Union Cabinet. The rates are cut with a view of getting back the telecom companies like Sistema Shyam and Tata Teleservices that had skipped the auctions last month.
An announcement was made by the telecom secretary, R Chandrasekhar, stating, that the CDMA operators who possess spectrum beyond 2.5MHz will be charged at the reduced base price with effect from January 1, 2013.
The companies are still not satisfied with the prices and are demanding a steeper cut. The company, Sistema Shyam said the recent decision by the Union Cabinet to cut the prices emphasizes that the demand for 800MHz is very less. The lobby group for CDMA operators, Auspi, said that the rate cut could have been at the order of 75 %.
The Government now plans to conduct the first round of auctions on March 11 to sell the unsold spectrum in the 1,800 MHz band which are used by the GSM operators such as Vodafone and Airtel. The base price for the 1,800 MHz band has been lowered by 30%. The auction will be followed by the auction for CDMA bands and then the 900MHz band for GSM providers.