There is a good news for MTS (Sistema Shyam Teleservices Ltd). The empowered group of ministers (EGOM) headed by the union finance minister P.Chidambaram today decided to reduce reserve price for auction of spectrum in 800Mhz band by upto 50%.

This means that the reserve price for 2.5 Mhz of spectrum in 800 MHz band will be only Rs 4,500 crore, if the EGOM decision is approved by the cabinet.

MTS did not participate in the auction that was held in November last year. It said that it did not do anything wrong and it had challenged the Supreme Court decision canceling its licences. The company has filed a curative petition in the Supreme Court.

The company has over 16 million subscribers. Out of which 1.7 million are that of its data services.

It is learnt that the telecom panel has proposed to lower the CDMA spectrum price by 30-50 per cent. Sibal after the meeting on Monday said that the cabinet would take a call on the reserve price of 800 MHz band and that the auction will be held in March.

Last month, the cabinet had approved 30 percent reduction in reserve price for 1800 MHz band in Delhi, Mumbai, Karnataka and Rajasthan circles where no bids were received during auctions held in November 2012.

The cabinet had also approved the reserve price for 900 MHz spectrum in Delhi and Mumbai which would be twice such revised reserve price for the 1800 MHz band. The reserve price for 900 MHz spectrum in Kolkata will be twice the price obtained for the 1800 MHz band for this service area in the auction held in November, 2012.

The 2G auction got tipid response in November last year with government managing to garner only Rs 9,400 crore against the target of Rs 40,000 crore.