COAI seeks 50% cut in spectrum price for 4 circles

In a letter to telecom minister Kapil Sibal, the industry body cited the case of CDMA spectrum for which the Centre decided to slash the reserve price by 50% since there were no takers for the spectrum in the previous auctions.

COAI has also requested reduction in the base price for all the 21 circles, which have certain amount of unsold spectrum. "In the interest of successful auction, the reserve price for 1,800 MHz auction should at least be reduced by 50% in the four circles in the forthcoming auction," COAI director-general Rajan Mathews said in the letter.

It has termed the government decision to reduce the reserve price of 1,800 MHz spectrum by 30% as both arbitrary and discriminatory, saying there is no basis for this differential treatment.

Meanwhile, Vodafone has also sought withdrawal of the recently-issued guidelines for the second round of spectrum auction, terming them "illegal, discriminatory and benefiting one set of players".Vodafone said the guidelines were discriminatory in nature, as they fix the reserve price of 900 MHz at three times the price of 800 MHz, while Trai had recommended both these bands to be treated at par.

Another telecom operator to express unhappiness over the issue of reserve price was the Norwegian telecom operator Telenor, which said it would participate in the auction only if the government reduced the reserve price in Mumbai by 50%. "Almost 70% of available spectrum remained unsold in the first round of auctions. If the DoT and the Supreme Court do not intervene, we apprehend that this second round will be no different than the first," the company said in a written statement.

The industry's clamour for a further reduction in the reserve price comes a month before the government plans to begin the auction of 800 MHz, 900 MHz and in certain circles 1,800 Mhz spectrum.

Close to 70% of the airwaves were unsold in the November auction that raised just R 9,407 crore, less than 25% of the amount the government was targeting to raise from spectrum sale this fiscal.

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