Base spectrum price cut by 30% in 4 circles

In an attempt to sell spectrum in Delhi, Mumbai, Karnataka and Rajasthan circles, which did not receive any bids in earlier auctions held in November, the Empowered Group of Ministers (EGoM) has decided to reduce the base price for 1,800 Mhz spectrum in these circles by 30 per cent and auction it before the end of this fiscal.

With this reduction in the base price for these four circles, the base price for pan-India spectrum will come down to Rs 11,900 crore from Rs 14,000 crore earlier.

However, the industry believes that the reduction is unlikely to bring more bidders as it is still on the higher side.

"The reduction is a step in the right direction but the price still remains high and it is unlikely that the interest may be renewed. With the reduced price, Rajasthan may get some takers but Delhi, Mumbai and Karnataka still remains expensive," said Rajan Mathews, director-general, Cellular Operators Association of India.

Meanwhile, the EGoM also decided to auction spectrum in 900 MHz band in Delhi, Mumbai and Kolkata simultaneously with sale of radiowaves in 1,800 Mhz.

"The EGoM met today and we have decided to auction the 1800 MHz band in four circles — Delhi, Mumbai, Karnataka and Rajasthan — and 900 MHz band in Mumbai, Kolkata and Delhi," said Telecom Minister Kapil Sibal.

The price for 900 Mhz spectrum is expected to be double of the reduced price of 1800 Mhz spectrum, based on the formula set by the Telecom Regulatory Authority of India. All these decisions will be implemented only after Cabinet's approval.

The EGoM, however, took no decision on the auction 800 Mhz CDMA band. The CDMA auctions, which was scheduled to happen in November, did not happen because none of the telecom companies bid for the CDMA spectrum.

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