Indian operators could take on an extra US$50 billion in debt over the next five years if the country goes ahead with controversial plans to re-auction new spectrum at sky high prices, according to a new report.

The report produced by PwC for the Cellular Operator Association of India (COAI), a body representing local operators such as Bharti Airtel, Vodafone Essar and Idea Cellular, comes ahead of a crunch meeting tomorrow to discuss the plans, reports the Financial Times.

The research estimates that Indian operators currently carry a debt burden of INR1,857 billion (US$33.7 billion), but warns this could rise 150 percent to about INR4,577 billion. It also claims that the proposed auctions could force operators to introduce average price increases of roughly 60 percent for end-consumers – and as high as 200 percent in urban areas.

“This will put a lot more pressure on the operators, in terms of their operating margins and their debt,” said Mohammad Chowdhury, head of telecoms at PwC in Mumbai, who conducted the research.

Last week, the Indian telecoms regulator reaffirmed plans to set a steep base price for its forthcoming re-auction of 2G spectrum. The Telecom Regulatory Authority of India (TRAI) argues that a starting price of INR36.22 billion (US$689.6 million) for a nationwide 1800MHz licence was “in line with international prices" – despite being ten times higher than the floor price set in a 2008 auction for the same airwaves.

The licences awarded in the earlier auction were cancelled by India’s Supreme Court in February after the process was ruled “totally arbitrary and unconstitutional,” and deemed to have lost the Indian government as much as US$39 billion in potential income.

The regulator also stuck to its earlier proposal that only about a fifth of the total available spectrum in the 1800MHz band should be auctioned initially, but suggested that a second round of auctions could be brought forward to the current financial year.