Round 2 of spectrum sale in March, Cabinet to decide on CDMA price cut

The second round of spectrum auction will begin in March after the Cabinet decides on reducing reserve price of 800 MHz band, used for offering CDMA-based mobile services.

"All auction will be held in March," Telecom Minister Kapil Sibal said after the EGoM meet New Delhi. On CDMA auction, he said the bidding for the 800 MHz band will take place in all the circles.

Meanwhile, sources said the Empowered Group of Ministers (EGoM) has proposed 30-50 per cent price cut in CDMA spectrum price and the Cabinet will take a final decision on the issue.

"Cabinet will decide on CDMA spectrum price cut. The auctions will begin on March 11," said a source.

Government failed to auction CDMA spectrum at 1.3 times higher reserve price than that of GSM spectrum in 1800 Mhz band in auctions that concluded in November. The pan-India reserve price for 5 Mhz of spectrum in 1800 Mhz band was fixed at Rs. 14,000 crore.

The last round of spectrum fetched the exchequer just Rs. 9,407 crore, as against the government expectations of around Rs. 28,000 crore, on account of high reserve prices.

The Supreme Court in February last year had cancelled 122 licences in the 2G spectrum allocation case. It included CDMA licences of Sistema Shyam Teleservices in 21 telecom circles and Tata Teleservices' in three circles.

It was necessary for these companies to win spectrum in the auction to continue operations in the circles where validity of their licences will end on January 18; but due to high reserve price for the spectrum, the two companies did not bid in the auction.

Tata Teleservices has said it will shut down CDMA operations in Jammu and Kashmir, North East and Assam, while SSTL had filed curative petition before the apex court seeking reinstatement of its licences but the case is yet to come for hearing.