Thanks to aggressive bidding for all of the spectrum on sale, India's government has already easily surpassed its target of garnering $10.3 billion from the latest spectrum auction.

At the end of Day 7, authorities were assured of receiving at least 922 billion Indian rupees ($14.6 billion) as a result of bidding, which had risen to a high of INR944 billion ($15.2 billion) at the end of Day 6. Shifts in bidders' spectrum-band preferences appeared to be responsible for the drop on Day 7.

Despite that, service providers are slowly moving towards the bid levels seen during the 2010 auction, when operators eventually coughed up a total of INR1.06 trillion ($16.8 billion) for 3G airwaves. Spending levels saw operators incur huge debts, delaying the expansion and upgrade of networks. (See India Targets $10.3B From Spectrum Auctions, Spectrum Pricing Provokes Jitters in India and Indian Operators Plot Spectrum Auction Moves .)

Prices have risen sharply in the current sale largely because India's biggest mobile operators -- Bharti Airtel Ltd. (Mumbai: BHARTIARTL), Vodafone India , Idea Cellular Ltd. and Reliance Communications Ltd. -- are desperate to retain soon-to-expire 900MHz licenses that are being re-auctioned.

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With 800MHz, 1800MHz and 2.1GHz spectrum also up for sale, 4G player Reliance Jio and Uninor -- a subsidiary of Norway's Telenor Group (Nasdaq: TELN) -- have also emerged as key participants in the auction process. (See Reliance Jio Entry Hots Up Indian Auction.)

Although spectrum was never likely to come cheap, fees of between $15 billion and $16 billion will have an unwelcome impact on operators' balance sheets. Total debts among Indian service providers had risen to more than INR2.24 trillion ($35.7 billion) at the end of the last financial year and the figure may be somewhat higher by the time the auction wraps up.

Rising debt levels could hinder the deployment of new technologies, such as 4G, and might even have an impact on the quality of services provided to mobile phone customers. Another concern is that heavy borrowing will lead to an increase in tariffs, while damaging service providers' profitability and margins.

At least operators have the option of paying one quarter of the spectrum bill upfront and the rest in phases over the next ten years. That should relieve some of the financial pressure on India's operators as they work on popularizing mobile data services.

— Gagandeep Kaur, contributing editor, special to Light Reading