CDMA spectrum price very high despite correction: IIFL

In an interview to CNBC-TV18, GV Giri, analyst, IIFL give shis views on the CDMA spectrum price cut annnounced by an EGoM. The EGoM has recommended reducing minimum price for sale of spectrum used by CDMA mobile operators by up to 50 percent in the second round of auction.  

Below is the edited transcript of Giri's interview to CNBC-TV18. Q: What would your initial comments be on this huge cut in the reserve price?
A: It is huge only because the earlier price itself was huge. Otherwise, this price probably is still too high and my expectation is that it will take a very brave company to bid even at these levels. Q: That was the fear that even Kapil Sibal had reiterated that the CDMA technology has very few takers to begin with. Do you see any kind of participation in the next round of the auctions?
A: That is correct. World-over, CDMA is giving way to 4G, like in the example of Verizon in the US. If anyone bids in this auction and gets the CDMA spectrum, then the risk is that that the company obstructs itself in trying to acquire some other company later on. This is because as per the mergers and acquisition (M&A) rules, if you already have a license and you acquire another license then you have to pay for the acquired company’s spectrum.