The Telecom Regulatory Authority of India (TRAI) plans to recommend that carriers be denied a refund of their licence fees if they lose or surrender permits, in a further blow to companies whose licences are set to be revoked after a court order.
The Supreme Court has ordered the withdrawal of 122 zonal telecoms licences awarded to eight carriers in a scandal-tainted 2008 sale. It has asked the government to reoffer the licences and radio spectrum via an open auction.
Norway's state-backed Telenor is one of the eight carriers affected, but market leaders such as Bharti Airtel and UK-based Vodafone are poised to benefit from that ruling.
Under current rules, one-time entry fees paid by operators when winning licences are "non-refundable". Some of the affected operators had suggested fees be refunded, or that they be offset against any payment due as a result of the upcoming auction.
In draft proposals released on Monday, the TRAI said it plans to recommend to the government that the entry fee remains non-refundable.
The government last year asked the regulator to give its proposals on an "exit policy" for carriers that want to quit operations.
The regulator said on Monday it would recommend to the government there was no need for a separate "exit policy" and to continue with rules that allow a telecom licensee to surrender licences by giving notice of at least 60 days.
The regulator's recommendations are not binding on the government.