The Empowered Group of Ministers (EGoM) on telecom which has the responsibility of setting norms for spectrum auction is learnt to have recommended a 20% lower base price at Rs 14,111-15,111.

The EGoM has suggested a base price between Rs 14,111 - Rs 15,111 crore for 5 Mhz of airwaves in auction. The mobile phone companies were demanding an 80% reduction from the Rs 18,111 crore proposed by Trai.

According to ET, the panel of ministers is also learnt to given two options to the Cabinet on the spectrum usage charge, which forms part of the revenue share for mobile phone companies. The first option is to keep this levy at 5% of the telco's annual revenues, or calculate this levy as per the current rules.

New entrants and companies that lost their mobile permits due to the Supreme Court can bid for a maximum of 6.25 MHz of airwaves in the 1800 MHz band in the upcoming auctions, while existing operators or incumbents, in the GSM space can bid for a maximum of 2 blocks or 2.5 MHz of airwaves.

EGoM has suggested to fix 1.3 times of this price as minimum price for companies that may bid for airwaves that are being used for providing CDMA services at present.

But the major telcos are not happy with the development. "The discrimination between GSM and CDMA is being further widened by keeping the auction reserve price for 800 MHz at 1.3 times of 1800 MHz on the rationale that less than 5MHz is being put up for auction. A similar option is not being extended to GSM operators to retain their 900 MHz spectrum at a price of 1.3 times of 1800 MHz, in the event that less than 5MHz is obtained at the time of the licence extension," the Cellular Operators Association of India said in a statement on Monday.

"It is saddening to know that EGoM has not given due consideration to the fundamental issue of unsustainable high reserve prices which will significantly increase costs, thereby invariably increasing the tariffs," said COAI's Director General Rajan S Mathews.

Reacting to this GSM industry body Cellular Operators Association of India said,"A similar option is not being extended to GSM operators to retain their 900 MHz spectrum at a price of 1.3 times of 1800 MHz," Mathews said. Association of Unified Telecom Service Providers of India (AUSPI), which represents CDMA players, said that the reserve price should be kept at Rs 3,500 crore for 800 Mhz spectrum band.

"Common man wants simple 2G services. There is no need to liberalise spectrum in 800 Mhz band as there are hardly any takers for airwaves in these frequencies. Liberalised spectrum will raise the tariff and take telecom services out of reach of common man," AUSPI Secretary General SC Khanna said. The EGoM is likely to meet tomorrow.