Regulation could cost Indian telcos $50bn India's struggling telecoms operators would be hit by an increased debt burden of nearly $50bn over the next five years, if controversial proposals by regulators to auction mobile spectrum are carried through, research suggests. The projection exacerbates growing discord between the nation's main telecoms companies, including Vodafone, Bharti Airtel and Idea, prompted by the auction rules outlined by the Telecom Regulatory Authority of India last month. The figures come ahead of an important meeting on Thursday of India's telecoms commission, a body bringing together various parts of the nation's government, to consider the proposals, which operators say will have disastrous implications for growth in a sector once seen as one of the country's greatest success stories. Following years of ferocious price competition and expensive infrastructure investment India's mobile operators already carry an estimated debt burden of Rs1,857bn ($33.7bn), but this could rise 150 per cent to about Rs4,577bn, the research suggests. The report, produced by consultants PwC for the Cellular Operator Association of India, an industry lobby, also argues the proposed auctions could force operators to introduce average price increases of roughly 60 per cent for consumers, or as much as 200 per cent in urban areas. The proposed auction rules, which suggest an up to tenfold increase in the price an operator would need to pay to secure a licence in addition to other measures, have been greeted with thinly disguised horror by leading telecoms operators in recent weeks. Sunil Mittal, chairman of Bharti Airtel, India's largest mobile operator by subscribers, said earlier this month that the industry faced "the most destructive period of regulatory environment I have seen in 16 years," uniting the sector's once-feuding operators in opposition to the measures for 4G auction. The re-auctioning of the licences follows the Supreme Court's cancellation of 122 second-generation mobile licences awarded in 2008 by the country's former telecoms minister, who was bailed this month on corruption charges, which some estimates suggest lost the country as much as $39bn in government revenue. The decision has been especially damaging for foreign groups such as Norway's Telenor and Russia's Sistema, which have taken forced writedowns of about $3bn since the cancellations and have said they will be forced to leave the Indian market unless the rules are significantly amended. The TRAI proposals came against a background of heightened public and media scrutiny of telecoms policy following a line of damaging corruption scandals, which some analysts believe led the regulator to introduce rules that could not be interpreted as benefiting specific telecoms companies, but which may ultimately cause the auctions to fail. "No regulator now wants to be seen to have caused a loss to the exchequer, because they feel that later on there may be a witch-hunt, or they may be charged with causing a loss," said Professor V Ranganathan, an economist and former member of TRAI. The auction at this high price may or may not take place. Mohammad Chowdhury, head of telecoms at PwC in Mumbai, who conducted the research, said: "This will put a lot more pressure on the operators, in terms of their operating margins and their debt. They would be under much more financial distress than they are already. Having projected that the auctions would take at least a year to organise, India's government is now racing to conduct them by the end of August, following a Supreme Court ruling last month.