Meanwhile, COAI denied the allegations of being undemocratic, non-transparent and biased by one its core members, the Tatas, and said the observations are born out of frustration rather than fact.
"We have found that COAI is not a transparent association and represents the views of only a few selected old players, as all powers/rights are vested in their hands," TTSL said in a letter to Rajan Mathews, director-general of COAI.
"By doing so, COAI along with these few older players, has become an obstacle in the growth of the Indian telecom industry," it added.
Mathews could not be contacted despite several attempts as his mobile phone was switched off.
The Cellular Operators Association of India has older players like Bharti Airtel, Vodafone and Idea Cellular as its core members. Sanjay Kapoor, CEO of Bharti Airtel, was elected chairman of COAI last week.
Tatas alleged that the COAI was focussed only on the 'myopic growth of a few telecom operators', without being representative of all the members.
"TTSL does not wish to continue associating with an association which just doesn't seem to be able to work in a just and equitable manner. We, hereby, formally tender our resignation as core member of COAI," it said.
Tatas did not rule out initiating legal action against the lobby of GSM operators.
Last week, the COAI had barred TTSL, along with two other operators -- Loop Telecom and Etisalat -- from exercising their franchise as the companies had not paid "disputed" dues.
"The company had, however, asserted that it had paid all its dues, though there were some disputed amounts. It said that the voting power was concentrated in the hands of three big operators and the other 8-10 members were virtually insignificant.
"Voting rights have been placed in the hands of a few key older players and these privileges are often abused by these players for their own advantage," TTSL said in the letter.
COAI refutes allegations by Tatas
GSM operators' lobby COAI has denied the allegations of being undemocratic, non-transparent and biased by one its core members, the Tatas, and said the observations are born out of frustration rather than fact.
Tata Teleservices had on Monday resigned from the core membership of the Cellular Operators Association of India (COAI), saying the association was representing the views of only a few select old and big players and had termed the functioning of COAI as "undemocratic, biased, non-transparent and unethical".
"TTSL is a member of two associations -- AUSPI (a lobby group of CDMA operators) and COAI. So it is obvious that there is a conflict of interest. This type of observation is probably borne out of frustration, rather than fact," COAI director-general Rajan Mathews told PTI, reacting to the allegations made by TTSL.
"COAI vehemently denies the allegations. It has always followed rules and regulations of the association. It is unfortunate that people should try and use the association for narrow parochial interests," Mathews added.
The COAI has players like Bharti Airtel, Vodafone and Idea Cellular as its core members. Sanjay Kapoor, the CEO of Bharti Airtel, was elected chairman of the COAI last week.