Lukewarm reaction to CDMA spectrum price reduction

18 Jan 2013

Operator reaction to the Indian government’s decision to halve the auction reserve price for CDMA spectrum has been positive but cautious, according to a Reuters report. Last November the government set a reserve price of INR36.4 billion (USD660 million) per megahertz of CDMA spectrum for all 22 of India’s telecoms circles, some 30% higher than the corresponding price for GSM frequencies. Operators had to secure a minimum of 2.5MHz in order to provide services, but the auction brought no bidders for the CDMA spectrum.

India is due to sell GSM airwaves worth INR200 billion at its next spectrum auction, which is due to start on 11 March, with the CDMA airwaves expected to be auctioned after that. A spokesperson for Sistema Shyam Teleservices Ltd (SSTL) said: ‘The decision by the Cabinet to reduce the CDMA reserve price by 50% clearly reflects the growing realisation 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.’