"It is no joke to raise Rs 450 crore in three days," said the chairman of a cellular company and felt that the entire aim of speedy redressal of the telecom sector's problems had been given the go-by in the process.

Telecom companies feel that the industry's survival was facing a threat and the delays could destroy many a company. The operators, however, said they would respect the order and furnish the undertakings that they would revert to the licence fee regime if the next government and Lok Sabha do not clear the revenue-sharing package.

Operators said that it would be extremely difficult to meet the deadline of August 15 to pay up further 15 per cent of the dues as they were yet to be intimated by the Department of Telecom (DoT) about the exact amount of outstanding they owe to the government.

DoT sources said that the calculations of the outstanding dues had been held over due to the court case. "We will issue the letters on Wednesday morning to all operators," said officials.

This is not the only worry of operators. Companies will now have to wait for the ultimate clearance from both the new council of ministers and the Lok Sabha. "Assuming that the package will be cleared, financial institutions (FIs) will not risk any more exposure in the telecom sector," said sources.

This in turn will inhibit growth and even make it difficult for some companies to fulfill their licence fee commitments. In addition, the companies will also have to furnish additional bank guarantees for the remaining arrears in short period of time, a request that many banks are not likely to take kindly.

"We have held discussions with banks and FIs and their response has not been favourable," said an operator. The lack of financial closure will make the business scenario unviable and have the net result of impeding future investment.

In addition, if the Parliamentary approval does not come through the operators will revert to the old licence fee regime. "Such a scenario will surely lead to a lot of litigation as every single operator will move the courts in order to seek compensation for the earlier delays caused by the government," said an operator.

The only positive aspect of the order is that the court granted that the undertakings will remain valid only till December end and not remain open ended, said sources.

PMO fax: Red herring?

The Delhi high court gave attorney general Soli Sorabjee a tough time on a fax purportedly from the Prime Minister's office to various newspaper offices on August 3.

Delhi Science Forum counsel Indira Jaisingh submitted the fax to the bench which said that the court's suggestion represents a strong vindication of the Government's stand on the desirability of this policy. Sorabjee in turn submitted a document titled `Talking Points for the Officer on Special Duty in PMO' and said that it was an internal document which had somehow found its way to newspaper offices.

Terming the Delhi Science Forum document a `red herring', Sorabjee said he would enquire the matter but insisted that no such statement had been made by the PMO. When contacted, PMO officials denied that any such press note had been released and there was no question of commenting on the deliberations in the court.

Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.