Russia’s Sistema has reportedly abandoned plans to acquire Indian operator Aircel, deciding instead to rebid for the Indian licences it had seized last year.

According to India’s Economic Times newspaper, the Russian conglomerate – which operates under the MTS brand in India – was in talks to acquire Aircel from majority-owner Maxis as a part of a $3 billion takeover.

But the report notes that a recent government move to halve the reserve price for 800MHz CDMA airwaves in an upcoming auction has significantly reduced the cost of Sistema buying back its licences.

MTS India had all but one of its 22 regional Indian licences cancelled by the country’s Supreme Court in February 2012 and decided not to buyback the airwaves when they were originally up for sale last November. The sale of CDMA spectrum in the November auctions was cancelled after potential bidders withdrew their applications, citing high reserve prices.

“Talks [between Sistema and Aircel] went cold shortly after the November auction failed,” said a source.

It is now thought better value-for-money for Sistema to re-enter the market by buying new spectrum rather than acquiring a rival.

Aircel (not to be confused with market-leader Airtel) is India’s fifth-largest GSM player and the country’s seventh-largest mobile operator overall. According to Wireless Intelligence, it had 63.3 million connections as of Q4 2012.