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[January 17, 2013]

Govt halves CDMA mobile spectrum auction price

NEW DELHI, Jan 17, 2013 (Mint - McClatchy-Tribune Information Services via COMTEX) -- The Cabinet on Thursday approved a proposal to cut the reserve price of spectrum in the 800Mhz band, commonly referred to as CDMA spectrum, by 50%, senior government officials said.

"The reserve price for the spectrum has been cut by 50%. All the spectrum auctions should now be completed by 31 March," Kapil Sibal, minister of communications and information technology, said after the meeting.

The proposal to cut the price came after the empowered group of ministers (eGoM) looking into spectrum issues recommended that the reserve price be cut by either 30% or 50%. The move comes after the Cabinet had already approved a 30% cut in the reserve price of spectrum in the 1800Mhz band in telecom circles where no bids were received in the November auction. These circles include Delhi, Mumbai, Rajasthan and Karnataka.

The move to cut the CDMA spectrum reserve price came after companies refrained from bidding for the radiowaves in a November auction. Tata Teleservices Ltd and Videocon withdrew their applications citing a high reserve price.

The government now expects to finalize the auction rules and procedure for the March sale by 11 February.

The government had earlier set the reserve price of CDMA airwaves at Rs 18,200 crore for 5Mhz across the 22 circles or telecom service areas in the country. This was three time higher than the GSM auction, which raised only a third of the minimum estimated Rs30,000 crore.

___ (c)2013 the Mint (New Delhi) Visit the Mint (New Delhi) at www.livemint.com Distributed by MCT Information Services

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