Govt cuts CDMA spectrum base price by 50% to attract bidders
New Delhi: Government Thursday approved 50 percent cut in the reserve price of CDMA spectrum, but companies said that there might not be any taker in the proposed auction as they feel even the reduced rates are still high.
"The Cabinet has approved 50 percent reduction in 800 Mhz band (reserve) price which was fixed earlier at Rs 18,200 crore for 5 Mhz," Telecom Minister Kapil Sibal told PTI.
With Thursday's reduction in price, existing CDMA players will have to pay one-time spectrum fee on the revised base price.
"It has been decided that existing CDMA operators holding spectrum beyond 2.5 Mhz will be charged at the revised reserve price, effecting from January 1, 2013, till such time as auction determined price becomes available," Telecom Secretary R Chandrashekhar told PTI.
However, industry body representing CDMA players, AUSPI, said there will not be any bidder for the 800 Mhz spectrum band even at reduced price.
"50 percent reduction is not adequate. We believe that even at 50 percent reduction ... I will not be surprised if there are no takers," AUSPI Secretary General Ashok Sud said.
The decision "reflects the growing realisation 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," CDMA operator Sistema Shyam Teleservices, whose 21 licences has been cancelled by the Supreme Court, said.
GSM players body COAI said that the decision will lead to non-level playing field in the sector and it may approach court in the matter.
Sibal said that auction of CDMA spectrum will be held immediately after auction of GSM spectrum bands 1800 Mhz and 900 Mhz planned to start from March 11 onward.