Cabinet cuts CDMA base price to half

The Union cabinet on Thursday decided to reduce the base price of CDMA spectrum by 50 percent for which the auction would take place in the month of March.

"The cabinet has taken a decision to reduce the CDMA reserve price by 50%," Union minister for telecommunications Kapil Sibal said. "Now the starting price would be Rs 9,100 crore instead of Rs 18,200 crore," he added.

Earlier, an empowered group of ministers (EGoM) had recommended in cutting the CDMA reserve price to 50% and the cabinet had the final say on this.

The auctions in all three spectrum bands - 900 MHz, 1800 MHz and 800 MHz- are set to start from March 11 to be completed by end of the same month. India is betting big on the revenue from spectrum auction to plug its fiscal deficit as the last auction that took place in November just garnered revenues of less than Rs 10,000 crore instead of Rs 40,000 crore as projected.

Though the moods in the CDMA lobby group AUSPI was quite satisfied, it seemed to have expected more. "We believe 50% is not enough, they should reduce it to more," said Ashok Sud, General secretary, AUSPI.

Reacting to the news COAI Chairman Rajan mathews said, "we clearly welcome the price reduction, but the pricing rational also should be applied to 900 and 1800.", "Otherwise there is a high risk of litigation as a result of this particular decision being made for 800 mhz," he added.

The last auction did not see any takers for CDMA spectrum, while only part of the airwaves for GSM services were sold with the industry criticising the reserve price as too high.