The Empowered Group of Ministers (EGoM) on telecom today proposed to reduce the reserve price for CDMA spectrum by 30% or 50% reduction from the base price of the November auction that failed to get any bidder for the 800 MHz spectrum.
“Cabinet will decide on CDMA spectrum price cut. Auctions for all spectrum bands will start on March 11,” said a top government official.
The EGoM, headed by finance minister P Chidambaram, also decided that auction for the 800 MHz spectrum will take place in all telecom zones, said telecommunication minister Kapil Sibal. The EGoM has also decided to conduct actions for 1800 MHz band and 900 MHz band simultaneously.
Meanehile, the Department of Telecommunication (DoT) is likely to take necessary steps so that telcos, which would lose operational permits on January 18 due to the February Supreme Court order, can continue operations till the auction.
The EGoM had earlier decided to conduct auction in Delhi, Mumbai, Karnataka and Rajasthan for 1800 MHz airwaves band at a revised based price (30% lower than the reserve price of November auction) as these circles did not receive bids in the November auction. Under the 900 MHz band it will conduct auction in Delhi, Mumbai and Kolkata. The base price for 900 MHz spectrum would be twice of the 1800 MHz base price for respective telecom zones.
The Government had fixed the base price for the 800 MHz spectrum band at 1.3 times higher than the reserve price of the 1800 MHz band for the November auction that failed to attract any bidder. The pan-India base price for 5 MHz of spectrum in 1800 MHz band was fixed at Rs 14,000 crore.
The EGoM also decided to put 34 blocks of 1.25 MHz each in the liberalised 900-MHz band up for auction in the Delhi, Mumbai and Kolkata circles. This would ensure at least 5 MHz, or four blocks of 1.25 MHz each, for a new entrant. The 900-MHz band is considered more efficient for high-speed data services.
In the 1800 MHz band, 15 MHz of spectrum would be put for auction for in Delhi and Mumbai each at base prices of Rs 485.15 crore and Rs 474.92 crore a block, respectively. In November, the government had offered only 10 MHz of the radiowaves in these circles, at reserve prices of Rs 693.06 crore and Rs 678.45 crore, respectively.
For Karnataka and Rajasthan, it would auction 10 MHz each,
In February last year, Supreme Court has quashed 122 licences for alleged corruption in spectrum allocation. These include 21 licences of Sistema Shyam Teleservices (MTS), 16 permits of Telenor controlled Uninor, 15 of Videocon and three CDMA permits of Tata Teleservices.
Meanwhile, Tata Teleservices has said it will discontinue CDMA operations in Jammu and Kashmir, North East and Assam, while Sistema has informed its 16 million customers that it intends to continue operations in India. Siatema has filed curative petition before the Supreme Court seeking reinstatement of its licences but the case is yet to come for hearing.
Telenor, which operates under Unior brand, has expressed interest to continue operations in Mumbai telecom zone.
The November auction fetched the government exchequer just Rs 9,407 crore, as against the government expectations of around Rs 28,000 crore, on account of high reserve prices.