The Union Cabinet on Thursday approved 30 percent reduction in reserve price for 1800 MHz band in the service areas of Delhi, Mumbai, Karnataka and Rajasthan where no bids were received during auctions held in November.

Last week Empowered Group of Ministers (EGoM) headed by the finance minister P Chidambaram had decided to lower the reserve price for spectrum by 30 percent in these circle.

The 2G auction got tipid response last month with government managing to garner only Rs 9,400 crore against the target of Rs 40,000 crore.

The cabinet also approved the reserve price for 900 MHz spectrum in Delhi and Mumbai which would be  twice such revised reserve price for the 1800 MHz band. The reserve price for 900 MHz spectrum in Kolkata will be twice the price obtained for the 1800 MHz band for this service area in the auction held in November, 2012.

 As regards payment for spectrum currently held in 1800 and 900 MHz bands by existing operators in 4 service areas (namely, Delhi, Mumbai, Karnataka and Rajasthan) where auction determined price is not available, it has been decided that such operators be charged at the revised reserve price, on the applicable quantum of spectrum, till such time as auction determined price becomes available, and that after the auction price becomes available, the earlier payment made on the basis of reserve price would be adjusted against the amount actually due.

The government feels decisions are expected to result in further efficient utilisation of the scarce natural resource of spectrum facilitating proliferation of telecom services in the country.