"Unless something is done, the entire industry which has private sector investment of up to Rs 30,000 crore may approach the court", warned P K Sandell, chairman Assocham expert committee on telecommunications.

Addressing newspersons, Sandell said the decision would lead to serious repurcurssions on struggling players in the sector. "The new telecom policy will be a dead document unless it clearly offers a transparent and clear solution for the rescue of existing players," he said.

As per DoT's directive, defaulting operators will have to shell out 20 per cent of their outstanding amounting to Rs 600 crore by March 31, with the remaining 80 per cent being pledged in a bank guarantee.

Sandell said the spectre ofbankruptcy was hanging over the telecom industry, "as the government has completely ignored the basic problems of the industry.

This will also send negative signals to foreign investors, forcing them to stay away from further investments in this sector as well as other important sectors, he said. In addition, massive retrenchment will become the norm and affect further growth of telecom in the country, claimed Sandell.

"The faulty licencing framework must be addressed first and the problems arising out of it need to be sorted out," he added. In absence of hard decisions by the governmeet, privatisation was being affected, he said.

The idea of privatisation was for a spread of players and not monopoly, said Modicorp CEO Umang Das. With 65 per cent of the cost going into licence fees, operators would be affected very badly, he said. He advocated the need for a holistic approach towards resolution of the problems.Almost 90 per cent of the operators were defaulting due to failure of DoT in honouring itscontractual obligations, he said. The group of telecom's recommendations should have been awaited by DoT before coming out with the order, he added.

Sandell has suggested a more practical cut-off date, two years from the effective date or up to March 31, 1998, the end of the latest financial year. This alone would enable the government to garner about Rs 800 crore, he said.