The Union Cabinet on Thursday approved a 50 percent cut in the reserve price of spectrum used by CDMA mobile operators, in a move to allow players like Russia's Sistema to continue operations in India.
After considering the recommendations of the Empowered Group of Ministers (EGoM), the Cabinet approved the move since no bids were received during auctions held in November 2012, a government statement said.
After the 50 percent reduction, pan-India 5MHz of 800 MHz CDMA spectrum will now cost Rs. 9,100 crore, Telecoms Minister Kapil Sibal announced, adding that the auction, for both GSM and CDMA airwaves, will be completed by March 31.
Russia´s Sistema Shyam TeleServices Ltd (SSTL), which had not participated in the November auctions last year and was set to exit the Indian market after losing all but one of 22 zonal permits, is now expected to bid in the March auction.
"The decision by the Cabinet to reduce the CDMA reserve price by 50 percent clearly reflects the growing realization 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," a company spokesperson said.
India had held auctions for its mobile airwaves last year after a Supreme Court order in the 2G spectrum scandal ruled that a 2008 graft-charged distribution process was invalid.