The Union Government on 17 January 2013 approved a 50 per cent reduction in the reserve price of spectrum used by CDMA mobile operators.
Spectrum auction, for both GSM and CDMA, is supposed to be completed by 31 March 2013 and thereafter the markets will decide how much revenue the government will get.
With the reduction of reserve price to 50 percent pan-India 5MHz of 800 MHz spectrum (CDMA radio waves) will now cost 9100 crore rupees.
It was witnessed that auction of CDMA spectrum that took place in November 2012 did not attract bidders due to high reserve price. The reserve price set was 11 times higher than what operators paid in 2008.
Earlier CDMA spectrum price fixed by government was priced at 1.3 times more than the GSM spectrum in 1800 Mhz band.
The Cabinet has already approved a 30 per cent cut in the reserve price of 1,800 MHz band spectrum used for offering GSM services.
The Supreme Court has recently allowed the companies whose licences were cancelled to continue operations till 4 February 2013 when the government is supposed to inform it of the final reserve or minimum price for the spectrum sale.