Up to 50 pc cut in 2G spectrum base price recommended

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SME Times News Bureau | 08 Jan, 2013
A ministerial panel headed by Finance Minister P. Chidambaram Monday recommended up to 50 percent reduction in base price for second generation (2G) airwaves auction that will begin March 11.

The Empowered Group of Ministers (EGoM) has recommended 30 percent cut in the reserve price for the unsold spectrum in 1800 Mhz band, for which the auction was held in November last year.

For the CDMA-based radiowaves, the panel has recommended up to 50 percent reduction in the reserve price.

Talking to reporters after the EGoM meeting here, Telecom Minister Kapil Sibal said all the auction for the 2G airwaves will be held in March. "All the auction for which announcement has been made today (Monday) will be held in March 2013."

The auction will start March 11 in 1800 Mhz and the 900 Mhz bandwidth of the GSM spectrum. It will be followed by the auction of the Code Division Multiple Access (CDMA) airwaves in the 800 Mhz bandwidth.

"The auction for 1800 Mhz band in four circles in which bids were not received in November 2012 will be put up for auction. The reserve price will be 30 percent lower than the reserve price that was fixed in November 2012 auction," Sibal said.

The final decision on the reserve prices will be taken by the Union Cabinet.

The government is forced to lower the reserve price of the 2G spectrum due to the tepid response in November auction.

While only part of the airwaves put for auction in the GSM category was sold, there were no takers for CDMA airwaves. The government was able to raise only Rs.9,407 crore in the November auction, as against the target of around Rs.30,000 crore.