Ministers’ group wants base price for CDMA spectrum cut by half

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Kapil Sibal
Kapil Sibal

The Empowered Group of Ministers (EGoM) has recommended up to 50 per cent cut in the reserve price for CDMA airwaves in the 800 Mhz band.

This comes after the Government did not receive any bid for this spectrum band in the auction held in November. Telecom companies had blamed the high reserve price for staying away.

Now, the Government wants to hold another round of auction with a lower base price.

While the earlier auction had started at Rs 18,000 crore for 5 Mhz of CDMA spectrum, this could now be lowered to Rs 9,000 crore.

Russian major Sistema may benefit most from the EGoM’s decision as its Indian venture’s pan-India CDMA licence is set to get cancelled on January 18.

The lowered price could mean that Sistema Shyam will be able to buy back the spectrum for an additional Rs 2,000 crore for 2.5 Mhz of pan-India CDMA spectrum.

DOT may move SC

Meanwhile, the Department of Telecom is likely to move a petition in the Supreme Court to extend the deadline

The reserve price for the 1,800 Mhz and 900 Mhz spectrum bands have also been reduced by 30 per cent. These two bands are used by GSM operators.

The Government had not received bids in four circles of Delhi, Mumbai, Rajasthan and Maharashtra for the 1800 Mhz band. All these bands will be put on the block starting March 11. The EGoM’s decision will be sent to the Cabinet for final decision.

Auction plan

Under the auction plan, the Government will sell 15 Mhz of spectrum in the 1800Mhz band in Delhi and Mumbai. Each slot is of 1.25 Mhz and operators will be allowed to buy at least four slots.

Bidders will be permitted to buy up to 25 per cent of all spectrum assigned in different bands.

The Government expects around Rs 25,000 crore from the sale.

(This article was published on January 7, 2013)
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