Shares of well-established telecom operators like Bharti Airtel, Idea Cellular and Reliance Communications Ltd came under pressure after cash-rich Reliance Industries Ltd (RIL) announced its decision to participate in the upcoming spectrum auction.

Investors have concerns that RIL's entry into the field could cut into incumbent players' profits in the future.

RIL's decision to participate in the upcoming 2G spectrum auction has raised the prospect of fierce bidding and intensifying competition in a market, where margins are already low.

Mukesh Ambani-led RIL is sitting on a huge cash pile, which will give it an edge of over rivals at the auction. While RIL has nearly $15 billion on its hand, market leader Bharti Airtel has around $10 billion in debt.

Commenting on the development, Credit Suisse analysts Sunil Tirumalai and Chunky Shah said in a note, "The immediate impact is that of intense competition in auctions. The longer term impact could be increased competition and higher capex for incumbents."

The analysts also slashed their rating on Bharti Airtel and Idea Cellular and cut their FY2015-16 earnings estimates for these telecom operators by 30-37 per cent.

Shares of Bharti Airtel slipped 4.84 per cent, while Idea Cellular, Reliance Communications and Tata Teleservices tanked 7.25 per cent, 4.18 per cent and 3.3 per cent, respectively, on the Bombay Stock Exchange.