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* Companies challenge auction of frequency in 900 MHz band
* India airwave auctions due in March
NEW DELHI, Feb 20 (Reuters) - India's two biggest mobilephone operators, Bharti Airtel Ltd and Vodafone India, challenged in court a government move to auctionairwaves in a band they already use.
It was not immediately known when the High Court of Delhiwill hear the pleas, but Vodafone Group Plc's Indian unit saidit expected a hearing soon. Any order in favour of the companiescould derail part of the auction due in March.
India is selling airwaves, along with stakes in state-runcompanies, to cut its fiscal deficit. It raised less than aquarter of a targeted $7.4 billion from an auction in November.
A senior official has said all airwaves being auctioned inMarch are worth at least $3.7 billion.
Bharti Airtel and Vodafone India use the 900 megahertzfrequency band in some service areas. The government is puttingthe frequency on the block in three cities - Delhi, Mumbai andKolkata - where existing permits are valid until November 2014.
The companies are required to win back the airwaves tocontinue using that frequency band, or bid for theless-efficient 1800 megahertz band. This would mean they wouldhave to build more mobile masts and invest more on technology.
The minimum bidding price for the 900 megahertz band hasbeen set at double the price for the 1800 megahertz one.
"Our decision to undertake this legal recourse is only aimedat protecting our legal and contractual right with regard to 900megahertz spectrum and ensuring business continuity," BhartiAirtel said in a statement.
Vodafone in a statement called the government's move towithdraw the 900 megahertz airwaves as "arbitrary" and that itis "entitled to a fair and reasonable extension of its licenceas per mutually agreeable terms".
India, which is also seeking bids for airwaves in the 1800megahertz and 800 megahertz frequency bands in the Marchauctions, has asked bidders to submit interests by Friday.
