Indian cabinet last week approved a decision to cut the reserve for an upcoming CDMA auction by 50% from its ill-fated previous attempt to auction the spectrum – but the price may still be too high to drum up much interest.
The reserve price for the 800-MHz auction will be reduced to the equivalent of 91 billion rupees ($1.69 billion) for pan-India spectrum, Business Standardreported.
The government has been forced to reduce the reserve price after not a single bidder applied to take place in the CDMA portion of last year's auction, which raised far less than anticipated.
But the price could still be too steep for a telecom industry which has cooled on the CDMA standard.
Sistema Shyam told the Standard that while the decision “reflects the growing realisation that the demand for 800 MHz is very limited,” and is a “step in the right direction... ground realities suggest one would have expected much greater reduction.”
The body representing India's CDMA players, the Unified Telecom Service Providers of India, said it would have preferred if base rates were cut by at least 75% from last year's reserve price.
The government plans the CDMA auction and eventually the auction of more 3G spectrum to to reallocate the spectrum freed by the imminent cancellation of 122 telecom licenses.
Bahrain's Batelco has meanwhile dismissed rumors that it is planning to use the upcoming second-round auctions to re-enter the Indian market.
A spokesperson for the operator toldGulf Daily News that it has “no plans to participate in forthcoming auctions to acquire a mobile licence and establish a new, start-up telecommunications company in India.”
Batelco hasn't completely ruled out further participations in the Indian market, but any such moves are likely to come via investing in existing operators rather than starting a new one, the spokesperson said.
Batelco sold its 42.7% stake in S Tel to its local partner in February last year for around $175 million, in the wake of the Supreme Court's decision to invalidate the 2G licenses. The company is currently suing S Tel for around $185 million, alleging a failure to adhere to a settlement deal covering the exit.