Cabinet okays 30 percent cut in spectrum reserve price for 4 circles

Airwaves in Delhi, Mumbai, Karnataka and Rajasthan found no taker in the auction as bidders found the prices too high.

"The reserve price for 1800 MHz band in the service areas of Delhi, Mumbai, Karnataka and Rajasthan be reduced by 30 percent from the previous reserve price," an official statement said citing a decision taken by the Union Cabinet at its meeting this evening.

The government also fixed the reserve price for spectrum in 900 MHz band, which will be auctioned simultaneously with 1800 Mhz airwaves in Delhi, Mumbai, Karnataka and Rajasthan.

The spectrum in 900 MHz will be auctioned in Delhi, Mumbai and Kolkata.

The reserve price in last month's auction was Rs. 693.06 crore for Delhi circle, Rs. 678.45 crore for Mumbai, Rs. 330.12 crore for Karnataka and Rs. 67.08 crore for Rajasthan.

The new base price after 30 percent cut would be Rs. 485.142 crore for Delhi, Rs. 474.915 crore for Mumbai, Rs. 231.084 crore for Karnataka and Rs. 46.956 crore for Rajasthan.

"The reserve price for 900 MHz spectrum in Delhi and Mumbai be twice the revised reserve price for the 1800 MHz and in Kolkata be twice the price obtained for the 1800 MHz band for this service area in the auction held in November, 2012," it added.

With regard to payment of spectrum currently held in 1800 and 900 MHz bands by existing operators in the four service areas where auction determined price is not available, it has been decided that such operators be charged at the revised reserve price, on the applicable quantum of spectrum, till such time as auction determined price becomes available.

"After the auction price becomes available, the earlier payment made on the basis of reserve price would be adjusted against the amount actually due," it added.

Reacting to the development, Cellular Operators Association of India (COAI) said there needs to be transparency in how the reserve price is arrived at.