The reference sent by communications minister Jagmohan to attorney general Soli J Sorabjee on Monday says, "any move for revenue sharing with existing licence holders should not result in litigation from those who have been left out in the earlier bidding round".

The reference gives the complete background of the earlier telecom policy and conveys DoT's fear of litigation in detail. While harping on the sanctity of contracts, the note reminds the AG of his earlier advice. The DoT has based its entire recovery strategy on the opinion rendered by the attorney general.

Sources say that the latest reference is almost similar to the one made in December last year, based on which Sorabjee had said that any concessions to operators should be conditional and the Government'saction should not send any signal or message that licensees can break conditions and remain in arrears.

However, it remains to be seen as to whether the AG will now come up with a solution for the operators' problems. The Jaswant Singh headed group on telecommunications (GoT) had earlier requested the AG in December 1998, to give his opinion on the issue of operators seeking a roll over in payments till March 31, 1999 and the change to a revenue-sharing model, would be morally and legally tenable.

The possibility of Sorabjee going against his earlier opinion seems remote, even as the GoT had expressed concern over the implementation of the new policy without litigation or controversy.

Added to this, the GoT's recommendation may also stand in the operators' way. It had said,"the most appropriate course of action to be followed is an incremental approach wherein existing basic and cellular licensees may continue under exisiting contracts and new licensees are brought into vacant circles under the newtelecom policy."

The GoT had opined that as and when the circles occupied by existing licensees are vacated either by expiry of the exisiting period, surrender through mutual consent or otherwise, new licensees should be appointed under the new policy regime.

The proposal to renegotiate existing contracts is the most desirable option for private telecom players. Having quoted absurdly high licence fees, the industry is grappling with a number of other issues like low growth in volume and revenues and lack of finance.

The private telecom industry feels that the AG will have no recourse other than maintaining a status quo over the licence-fee structure. This factor coupled with the likelihood of Soli Sorabjee playing it safe by sticking to his earlier opinion may well prove to be the private operators' nemesis.

DoT's entire licence fee recovery strategy has till now been based entirely on attorney general's four recommendations of renewing lapsed bank guarantees (BGs), enhancing amounts, asking for newbank guarantees in cases where they are about to expire and recovering 20 per cent dues as bonafide.

It now seems that circles occupied by existing licensees will be vacated either by expiry of exisiting period, surrender through mutual consent or otherwise and new licensees will come in.