The Union Cabinet has lowered the reserve price for the CDMA spectrum auction by 50 per cent, say news reports.
This decision comes in wake of the recommendations of the Empowered Group of Ministers (EGoM), which had suggested reducing the reserve price of CDMA spectrum in the 800 MHz band by 30 per cent to 50 per cent.
Prior to this, the Telecom Regulatory Authority of India had recommended a reserve price of Rs 360 billion for the CDMA spectrum auction. With the revision of the reserve price, the new base price for 5 MHz units of CDMA spectrum in the 800 MHz band will be Rs 90 billion.
The reduction in the reserve price is expected to encourage operators offering CDMA-based services to participate in the forthcoming spectrum auction. Both Tata Teleservices Limited and Videocon Telecommunications had withdrawn from the November 2012 spectrum auction, citing the reserve price of the CDMA spectrum to be too high. The government had set the reserve price for the spectrum in the 800 MHz band 1.3 times higher compared to the reserve price of GSM spectrum.
Commenting on this development, a spokesperson from Sistema Shyam TeleServices Limited said, ?The cabinet?s decision to reduce the CDMA reserve price by 50 per cent clearly reflects the growing realisation that demand for 800Mhz is very limited. The decision taken is a step in the right direction. However, as per ground realities, one would have expected much greater reduction.?
