DoT sources said that other cellular and basic licence holders, which have paid 20 per cent of the outstanding licence fee, will be issued letters by Friday.

The department is seemingly caught in a bind in the cases of Koshika (a Usha Group company), Aircel and Evergrowth (both Essar group companies) as the licences of these companies have already been cancelled. DoT has now taken the stand that it would not invite these operators to switch over to revenue sharing as doing so would tantamount to reversing the cancellation of licences.

The deadline set by the Union cabinet for private operators to accept the scheme is July 31. Telecom Commission chairman Anil Kumar had earlier indicated that operators will be given 7 to 10 days to make up their minds.

DoT's move to keep three large operators out of the revenue-share regime has raiseddoubts over the success and smooth implementation of the scheme. Sources said though DoT's stand was legally correct, it went contrary to the spirit of the recent revenue-sharing package approved by the Union cabinet.

"Technically, almost all private basic and cellular companies continue to be defaulters, as they have only paid up 20 per cent of dues," said an industry source, adding that with revenue sharing in place, it was quite possible that the cancelled licencees would be able to arrange the necessary funds from financial institutions to pay off their dues.

Sources added that the Prime Minister's Office (PMO), which is closely monitoring the situation, was also seized of the situation. PMO officials are reported to have been caught off guard by DoT's cancellation of Evergrowth Telecom's cellular services in Punjab and the encashment of Koshika Telecom's bank guarantee on Tuesday.

Put together these three companies account for a very large chunk of the cellular subscribers in the country. WhileKoshika had licences for Bihar, Orissa and Uttar Pradesh, Aircel Digilink operated in Rajasthan, Haryana and UP (East) while Evergrowth operates cellular servcie in Punjab and Chandigarh.

The companies owe close to Rs 1,000 crore to the DoT as licence fee. Eventhough the licences have been cancelled, a number of recent court decisions have gone in favour of the operators. For instance, DoT has been ordered to reconnect Koshika's services in Orissa and Uttar Pradesh. This is a fallout of cases filed by subscribers against DoT's disconnection of services.

With a long-term legal battle looming large, it remains to been seen as to how the department will achieve the objective of implementing the fresh policy uniformly across all circles, while simultaneously making a new beginning with beleaguered private operators.