A regulator's plan to impose new fees for second-generation mobile spectrum in India sent shares skidding in carriers including Bharti Airtel, which called the proposal "shocking, arbitrary and retrograde".
Market leader Bharti, which may have to pay an estimated $1.4 billion if the proposal is adopted, saw its shares end 8.3 per cent lower on Wednesday, wiping $2 billion off its value and prompting an unusually strong response from a major Indian firm.
Shares in smaller rival Idea Cellular fell 8.2 per cent.
On Tuesday, the telecoms regulator recommended that companies pay a one-time fee for holding 2G radio-spectrum beyond 6.2 megahertz (MHz) based on 3G prices, a move that will hit established operators dominant on the platform.
Bharti and others, including Vodafone's Indian unit, are locked in a multi-billion bidding war for 3G spectrum that has exceeded forecasts.
"We are confident that the DoT (Department of Telecommunications) and the government will take a rational approach and summarily reject these arbitrary, impractical and perverse recommendations," Bharti said in a statement.
The regulator's recommendations must be accepted by the government before they become law.
Analysts said the proposal would stretch the balance sheets of market leaders, such as Bharti, Vodafone Essar, and Idea, which compete in a cut-throat market and face billions of dollars in capital expenditure to pay for 3G spectrum and build high-speed networks.
Meanwhile Bharti is absorbing its recent $9 billion acquisition of Zain's operations in Africa.
"This has come at a time when Bharti is working on closing the Zain deal integration, 3G auction is acting as a burden and the local competition is not showing signs of stabilising," said Sanjay Chawla, an analyst at Anand Rathi Financial Services.
Bharti shares fell as much as 9 per cent during the day to its lowest level in more than five months. The stock was the top faller in a steady Bombay 30-share index and has lost 21 per cent this year, while the index is down by 1.5 per cent.
Shares in Reliance Communications ended little changed, and analysts said the No. 2 operator would be hurt less as it is mainly a CDMA operator and does not hold much additional spectrum beyond the 6.2 MHz limit for GSM services.