By Aditya Kalra and Aditi Shah

NEW DELHI (Reuters) - Indian billionaire Mukesh Ambani's Reliance has privately argued that the telecom regulator incorrectly concluded that home satellite broadband spectrum should be allocated by New Delhi and not auctioned, intensifying a face-off with Elon Musk's Starlink.

How spectrum for satellite services in India will be given out has been a contentious issue since last year.

Musk's Starlink and its global peers like Amazon's Project Kuiper back an administrative allocation, while Ambani - Asia's wealthiest man who runs India's Reliance Jio - is arguing for an auction process.

The current dispute is over interpretation of Indian law that some in the industry say paved the way for the allocation of spectrum last year as Musk wanted.

But Reliance is arguing no provisions are in place for satellite broadband services for individual or home users, industry sources said on Sunday.

The telecom regulator, TRAI, is currently holding a public consultation but Reliance in a private Oct. 10 letter asked for the process to be started afresh as the watchdog has "pre-emptively interpreted" that allocation is the way forward, not auction.

"TRAI seems to have concluded, without any basis, that spectrum assignment should be administrative," Reliance's senior regulatory affairs official Kapoor Singh Guliani wrote in the letter to India's telecoms minister, Jyotiraditya Scindia.

TRAI has in its consultation paper indicated Indian laws mandate allocation of spectrum for such services without conducting any studies, Reliance added in its letter, which is not public.

Reliance and the telecoms ministry did not immediately respond to requests for comment.

A senior TRAI official said on Sunday that due process is being followed and Reliance is welcome to share feedback during the consultation period.

The recommendations of the watchdog will form the key basis for the government's decision on the matter.

Deloitte says India's satellite broadband service market will grow 36% a year to reach $1.9 billion by 2030.

Tesla boss Musk is keen to launch Starlink in India, though a final decision on spectrum allocation remains a sticking point.

Starlink argues administrative allotment of licences is in line with a global trend. Reliance says an auction is needed for a level-playing field as foreign players could offer voice and data services and compete with traditional players, Reuters has reported.

Reliance's Jio is India's No. 1 telecoms player with 480 million users.

(Reporting by Aditya Kalra)