Spectrum prices slashed

After the muted response to 2G spectrum auction due to the high reserve price, a ministerial panel has agreed to cut the base price for airwaves in four circles, where there were no takers, by 30%, but the industry dismissed it as not being good enough.
The decision by the empowered group of ministers will pave the way for a fresh attempt to sell frequency in the 1800 Mhz band in Delhi, Mumbai, Karnataka and Rajasthan after the government received muted response to its earlier auction, managing to get only Rs 9,400 crore.
The reserve price for last month’s auction per block in Delhi was Rs 693 crore, while it was Rs 678 crore in Mumbai, Rs 330 crore in Karnataka and Rs 67 crore in Rajasthan.
The industry did not seem enthused, saying the government had only complicated matters by reducing the reserve price for four circles.
Telecom operators have opposed the high base price as well as refarming — which is a shift from 900 Mhz to 1800 Mhz — arguing that the mega liability would kill the industry which is already under stress.
Along with the sale of 1800 Mhz spectrum in the four circles, the government has also decided to simultaneously auction airwaves in the 900 MHz band in Delhi, Mumbai and Kolkata in a move aimed at meeting the Rs 40,000 crore revenue target from the segment.
After the meeting, communications & IT minister Kapil Sibal told reporters that his ministry would soon seek Cabinet approval on the revised pricing and would try to complete the auction during the current financial year itself.
The ministers, however, did not decide on selling frequency in the 800 Mhz band that is used by CDMA operators.