The commission has, however, stood by the higher annual spectrum fee proposed earlier by the government and also recommended by the Telecoms regulatory Authority of India (TRAI).

"The telecom commission has not found it possible to accept the TRAI's recommendations for an additional 2 percent administrative charge," Akshay Rout, said, without elaborating.

On Dec. 10, the regulator approved a government proposal to increase the annual spectrum fee for "standalone" 3G operators to 3 per cent of their revenue, from 1 per cent proposed initially.

Existing Indian operators, who already offer second-generation telecoms services and win 3G spectrum, will be charged between 3 and 8 per cent of their revenue depending on the total spectrum held both for 2G and 3G services, it said.

On the top of the annual fee, the regulator had also recommended to levy an administrative charge of 2 per cent of the highest bid for the 3G spectrum from the second year of spectrum allocation.

India has set a reserve price of Rs 20.20 billion for spectrum covering all of India for the auction, but bids are expected at much higher levels as the potential for telecoms services in the world's fastest-growing telecoms market remains huge.

Any additional fee levied on firms would deter interest in participating in the auction amid a global financial meltdown and tight liquidity, analysts say.