  The Union Cabinet on Thursday gave its nod to the 50 % reduction in the reserve price for 800 MHz band in all service areas.
Early this month the empowered group of ministers (EGOM) headed by the union finance minister P.Chidambaram had decided to reduce reserve price for auction of spectrum in 800Mhz band by upto 50%.
This means that the reserve price for 2.5 Mhz of spectrum in 800 MHz band will be only Rs 4,500 crore.
Russian telecom giant Sistema which operates as MTS in India will participate in the auction for spectrum in 800 MHz band to be held in March. Now the company is likely to bid in at least in important category “A” and category “B” circles.
MTS did not participate in the auction that was held in November last year. It said that it did not do anything wrong and it had challenged the Supreme Court decision canceling its licences. The company had filed a curative petition in the Supreme Court.
“The decision by the Cabinet to reduce the CDMA reserve price by 50% 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.” SSTL said in a statement. The company has over 16 million subscribers. Out of which 1.7 million are that of its data services.
As regards payment for spectrum currently held in 800 MHz band by existing operators in all service areas where auction determined price is not available, it has been decided that such operators be charged at the revised reserve price, w.e.f. 01.01.2013 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 said that the above decisions are expected to result in further efficient utilisation of the scarce natural resource of spectrum facilitating proliferation of telecom services in the country. |