The GSMA, which represents GSM operators from across the world, has said that the new recommendations of India’s telecom regulator Telecom Regulatory Authority of India (Trai) would discourage investments in mobile broadband infrastructure and would also increase prices for the consumers in the country.

"Trai's proposed reserve prices for upcoming spectrum auctions are so prohibitively high that they will inevitably curtail mobile operator investment in mobile broadband infrastructure and increase prices to consumers," the global body said in a statement.

It also said that if the recommendations are accepted by the government then it will create artificial scarcity of this critical resource for the telecom service providers. It pointed that the recommendations are not in line with the international best practice in spectrum policy and would also put at risk, the billions of dollars worth of investments in new mobile infrastructure.

The TRAI has proposed a reserve price of Rs 3,622 crore for 1MHz of pan-India 2G spectrum in the 1800 megahertz band as against Rs 380 crore, which was set for auctions in 2008. Telecom service providers and experts say that if the recommended reserve price is accepted then this could increase costs for the players and will ultimately make service more expensive for the consumers.

The Cellular Operators Association of India (COAI) and the Association of Unified Telecom Service Providers of India (AUSPI) have also released a joint statement saying that recommendations are shocking and described them as being arbitrary, regressive and inconsistent.