India approves cut in reserve price of unsold airwaves - minister

NEW DELHI Thu Dec 13, 2012 9:00am EST

NEW DELHI Dec 13 (Reuters) - The Indian cabinet approved a 30 percent cut in the reserve price of mobile phone airwaves in four telecommunication zones, a minister said on Thursday, after carriers shunned last month's auction in those zones saying the prices were too high.

The cabinet also approved a ministerial panel's proposal to set the auction reserve price of more efficient 900 megahertz band airwaves at twice that of the basic phone airwaves in the 1800 megahertz band, the minister, who did not want to be named, told reporters.

India is betting on the revenue from phone airwaves auctions and stake sales in state-run companies to plug its widening fiscal deficit. The government raised less than a quarter of its 400-billion-rupee ($7.4 billion) target in last month's auction.

The government aims to conduct the next auction during the current fiscal year ending in March. It also plan to sell 900 megahertz band airwaves in a separate, but simultaneous auction. ($1 = 54.2450 Indian rupees) (Reporting by Nigam Prusty; editing by Malini Menon)