GSM operators' association COAI today said the rising cost of spectrum could affect telecom growth plans, particularly in rural areas.

The share price of leading telecom operators nosedived after TRAI made new recommendations on 2G spectrum pricing.

Airtel shares on the BSE closed 3.11 per cent lower at Rs 285.20 on the BSE, while Idea Cellular closed at Rs 59.70, down 5.31 per cent.

RCom was down 4.95 per cent at Rs 147.05, while MTNL hit a low of Rs 68.15, down 1.8 per cent on the BSE.

Tele-density in rural areas could be the biggest casualty.

"Growth could be hampered," said COAI Director-General Rajan S Mathews on the TRAI recommendations, which have suggested that telcos pay for 2G spectrum beyond the contracted amount of 6.2 Mhz, based on prices discovered through the 3G auction.

Asked if the rising spectrum costs suggested by TRAI could lead to a reversal of the current low tariff regime, as operators would try to recover costs, he said, "Tariffs can't be arbitrarily increased."

Call rates in India have touched their lowest levels, which are hitting the profitability of the mobile companies.

Mathews said the good thing about the recommendations was that TRAI has proposed a reduction in licence fees to 6 per cent of gross adjusted revenue, which could bring down the overall cost of the operators.

Mathews said capping of spectrum per operator can also be detrimental to the expansion plans of the operators. TRAI has proposed a 10 Mhz spectrum cap for GSM operators.

A leading mobile operator said it is reading the fine print before making any comment on the likely repercussions if the recommendations are passed.

India, the fastest growing wireless market in the world, has 584 million mobile subscribers and about 15 million users are added monthly.