NEW DELHI (Reuters) -A group representing Indian telecom giants Reliance Jio and Bharti Airtel has said their businesses will suffer if India prices satellite spectrum at "unjustifiably low" rates that benefit satellite internet services such as Elon Musk's Starlink.

India's telecom regulator in May proposed satellite service providers pay 4% of their annual revenue to the government for offering services. Starlink had lobbied India not to auction spectrum but just assign licences in line with a global trend, saying it is a natural resource that should be shared by companies.

The Cellular Operators Association of India in a May 29 letter to the telecoms ministry sought a review of those pricing proposals, saying traditional players pay higher upfront auction charges for telecoms spectrum which make their payments to the government for spectrum roughly 21% higher, when compared to what satellite players would pay.

"Price per MHz should be equivalent or at least comparable for both, especially when used to reach the same consumers for identical services," said the letter, seen by Reuters.

"Satellite services can offer competitive and affordable alternatives to terrestrial broadband," it added.

Reliance, led by Asia's richest man Ambani, and Airtel didn't respond to Reuters' request for comment. Starlink was not immediately available for comment.

A senior Indian government source told Reuters on Wednesday the telecoms ministry is still reviewing the pricing recommendations made by the regulator, adding such industry concerns have been raised in the past.

Telecom players like Reliance Jio are concerned they will be offering similar wireless broadband services as satellite providers but paying much more, said an industry source with direct knowledge of the situation.

Reliance and others have spent nearly $20 billion in recent years to get 5G spectrum via auctions to offer telecom, data and broadband services.

Ambani's company unsuccessfully lobbied New Delhi for months to auction satellite spectrum, and not allot it administratively as Musk's Starlink wanted.

Though Reliance and Airtel have signed distribution deals in March for Starlink equipment, they will continue to compete with Musk's offerings to customers once launched.

The process of Starlink getting a license is "nearly complete", telecoms minister Jyotiraditya Scindia told The Print news website on Tuesday.