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India Halves CDMA Radio Spectrum Reserve Price
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India's government has approved plans to halve the reserve price of CDMA radio spectrum in the forthcoming spectrum auction. Last year, all the bidders dropped out of the auction citing the high reserve price that had been set.
"The Cabinet has approved 50 per cent reduction in CDMA spectrum (reserve) price which was fixed earlier at Rs 18,200 crore (pan India 5MHz)," Telecom Minister Kapil Sibal said.
The Government had earlier fixed CDMA spectrum price at 1.3 times more than the GSM spectrum in 1800 Mhz band, due to its greater propagation properties, but this drew protests from the mobile networks.
The spectrum auction is due to take place by the end of March in order to fit into the current financial year. Under the new plans, a 5MHz of 800 MHz spectrum covering the entire country will now cost Rs 9,100 crore (US$1.7 billion).
The CDMA licences of Sistema Shyam Teleservices (MTS) in 21 telecom circles and Tata Teleservices' in 3 circles were cancelled by the Supreme Court last year. MTS has threatened legal action to recover its licenses which expire in the middle of this month.
Reacting to the development, a spokesperson for MTS/SSTL said: "The decision by the Cabinet to reduce the CDMA reserve price by 50% clearly reflects the growing realization that demand for 800Mhz is very limited. The decision taken is a step in the right direction. However, as per ground realities one would have expected much greater reduction."
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