Cabinet approves slashing of CDMA base price by half

After failing to elicit desired response in the GSM spectrum auction because of high reserve price, the Centre on Thursday decided to slash reserve price for CDMA spectrum by 50 per cent.

“The Cabinet has approved 50 per cent reduction in the 800 MHz band (reserve) price which was fixed earlier at Rs 18,200 crore for 5 MHz,” Union Telecom Minister Kapil Sibal told reporters. Auction for the CDMA radiowaves is expected to start in March this year.

With the reduction in price, existing CDMA players will have to pay a one-time 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 said.

But CDMA players said the base price was still high. AUSPI (Association of Unified Telecom Service Providers in India), the organisation representing CDMA operators said there will not be any bidder for the 800 Mhz spectrum band even at reduced price.

"50 per cent reduction is not adequate. We believe that even at 50 per cent reduction ... I will not be surprised if there are no takers," AUSPI Secretary General Ashok Sud said.

GSM players body COAI (Cellular Operators Association of India) said that the decision will lead to non-level playing field in the sector and it may approach court in the matter.