"We are deeply concerned with these developments as these are unfair, discriminatory, contrary to the terms of licence and against public interest," Vodafone's Resident Director T V Ramachandran said in a letter to Telecom Secretary R Chandrashekhar.
The telecom secretary had recently said that government will auction the spectrum being held by incumbent GSM operators in 900 MHz band whose licence are coming up for renewal in November 2014.
They will, however, be allowed to hold 2.5 Mhz in each circle in the same band even after expiry of their licences after a paying a market-determined price.
Vodafone is one of the company whose licences in Delhi, Mumbai and Kolkata are due for renewal in 2014.
"Most importantly, they, in effect, are coercing participating in the auction particularly in our case since three of our unified access licences are due for extension in November 2014," he added.
Ramachandran said that any decision that licences can be assured of spectrum only if they participate in the auctions is completely untenable both under policy and licence.
The Union Cabinet on December 13 approved reduction of 30 per cent in reserve price for spectrum in 1800 MHz band for 4 service areas - Delhi, Mumbai, Karnataka and Rajasthan where no bids were received during auctions held in November, 2012.
The new base price after 30 per cent cut would be Rs 485.142 crore for Delhi, Rs 474.915 crore for Mumbai, Rs 231.084 crore for Karnataka and Rs 46.956 crore for Rajasthan.
"At these reserve prices, spectrum cost will be excessive resulting complete non-viability of our businesses. It would jeopardise competition amongst service providers, ultimately harming the consumers and the sector," he said.
He said that at such rate of spectrum, Company's spectrum cost in Delhi and Mumbai will be 15 to 19 times more than other existing players whose licences are not under extension at present.
Vodafone requested government to review its decision and said , "There are some other decision taken by the Union Cabinet that are of concern to us."