The telecom department (DoT) is asking for an increase of 17 per cent in the base price for 2G spectrum bids above the proposed rate by the telecom sector watchdog, the Telecom Regulatory Authority India (TRAI).

The move has increased concerns for the telecom sector companies, who were expecting the government to reduce the level of prices or bids recommended by the TRAI. A panel of the DoT that was studying Trai's proposals on spectrum auctions said that the reserve price of second-generation airwaves in the 1800 MHz band should be revised to Rs 4,245 crore per unit.

The proposed price by the TRAI for a similar airwave is Rs 3,622 crore per unit on a pan-Indian basis. DoT has also said that it will not accept a proposal to permit service providers to stagger their payments for airwaves won in the auction process.

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.