The proposal envisages payment of 10-15 per cent of the total revenue earned by the service providers to the government under the new system.

Highly placed government sources said the move has the support of the prime minister's office and was not being opposed by the finance ministry and the telecom department.

This is likely to form part of recommendations of the telecom sub-group of the information technology task force chaired by Planning Commission deputy chairman Jaswant Singh following intense lobbying and representations from the beleagured industry.

The introduction of the revenue sharing system would result in foregoing of assured licence fees. This means a loss of thousands of crores of rupees to the government in the short run.

The task force is likely to submit itsrecommendations by the third week of this months. The new telecom policy is slated to be announced by December 31.

The government had granted 42 licences to 22 companies over two phases in 1994 and 1995. However, most of the companies have defaulted in payment of licence fee. The department of telecom's efforts to recover the oustanding licence fee have been stalled by stay orders granted by the Telecom Regulatory Authority of India or courts.

Some of the companies which have gone to Trai or the courts for stay on encashment of their bank guarantees include JT Mobiles, Aircel Digilink, Koshika Telecom, Reliance Telecom and Modicom Network.

After several representations by the industry for concessions in the wake of mounting losses, the government agreed to extend the licence period for cellular operators from 10 to 15 years but rejected the demand of granting a two-year moratorium on payment of licence fee. The matter relating to quantum of licence fee payable for the extended period of five years wasreferred to Trai for its recommendations on the basis of which the government would take a decision.

Almost all the cellular operators have defaulted in their payments. JT Mobile is the biggest defaulter with arrears of Rs 468.45 crore as on June 30, 1998 followed by Koshika Telecom (Rs 193.32 crore), Fascel (Rs 163.10 crore), Birla (Rs 156.90 crore), Aircel Digilink (Rs 133.76 crore), US West BPL (Rs 61.59 crore), Modicom Network (Rs 60.43 crore) and Tata Communications (Rs 45.50 crore).