The union cabinet has endorsed a recommendation of the empowered panel to reduce the prices of CDMA (code division multiple access) spectrum for the next auctions to be held this year.

The union cabinet gave its not to the recommendation from empowered group of ministers (EGoM) on Thursday, heeding to similar demands from the industry members. The Empowered Group of Ministers (EGoM) on telecom, which is headed by finance minister P Chidambaram, had recommended that the base price of November auction for the 800 MHz spectrum used in CDMA services should be reduced by 30 per cent or 50 per cent for auctions this year.

"Reserve price for 800 MHz band in all service areas be reduced by 50% from the previous reserve price as approved by the cabinet in its meeting held on August 3, 2012," said a cabinet statement.

The 800 MHz band is used for CDMA services and it found no buyer during the auctions held in November of 2012. There is much lesser demand for CDMA airwaves in the country while operators are struggling to improve service due to the limit supply of spectrum in GSM services in the country.

Experts say that the 800 MHz band is close to the GSM airwaves and thus it can be used by 2G telecom service providers to offer data services. Bharti Airtel, Vodafone India, and Idea Cellular have asked the telecom authorities to consider allocating unused CDMA spectrum for GSM services.