The Cabinet today approved a 50% cut in the auction reserve price for CDMA spectrum, a move which may encourage Russia's Sistema to participate in the auction process.
The auction which was held in November last year, after Supreme Court direction of cancelling all licenses and conducting auction to give spectrum to all the firms, saw no bidder for CDMA segment. Sistema had said the reserve was too high to bid.
"The Cabinet has approved 50% reduction in CDMA spectrum (reserve) price which was fixed earlier at Rs 18,200 crore (pan India 5MHz)," Telecom Minister Kapil Sibal said. After 50% reduction, pan India 5MHz of 800 MHz CDMA spectrum will be priced at Rs 9,100 crore.
The spectrum auction, both GSM and CDMA, will be completed by March 31 and markets will decide how much revenue the government will get, he added.
The Cabinet, headed by Prime Minister Manmohan Singh, considered the recommendation of the Empowered Group of Ministers (EGoM) which suggested a 50% cut in the reserve price of 800 MHz band.
The Cabinet has already approved a 30% cut in the reserve price of 1,800 MHz band spectrum used for offering GSM services. SC has recently allowed the companies, whose licences were cancelled, to continue operations till February 4.