The empowered group of ministers (EGoM) on Friday slashed the reserve price for 2G spectrum auction by 30 per cent in the 1800 MHz band, in order to receive more bids for the next auction.

The EGoM slashed the reserve price for the spectrum in four key circles, viz. Delhi, Mumbai, Rajasthan and Karnataka, where no company had placed bids due to high reserve price.

Announcing the reduction, a senior telecom department official said, "The EGoM has decided to reduce the reserve price by 30% in the four circles in 1800 MHz band, where the spectrum remained unsold."

As per analysts, by slashing the reserve prices in Delhi, Mumbai, Karnataka and Rajasthan, the government finally admitted that it failed to discover market prices in the November auctions.

Many analysts also warned that even a reduction of 30 per cent in reserve prices of spectrum may not be able to lure the majority of telecom players.

Telecom Minister Kapil Sibal also revealed that the group of ministers also decided to put spectrum in the 900 MHz band in Delhi, Mumbai and Kolkata for auction. However, he added that no decision was taken on auction of 800 MHz.

The government's much-hyped auction last month turned out to be big flop as it could garner only Rs 9,047 crore, less than a third of the government's aim of around Rs 28,000 crore.