Top sources told The Financial Express that the possibility of the licences being renewed or issued afresh was "next to impossible". This is due to a number of factors including the complex legal and political implications in the event of a decision in favour of these companies.

Sources also said that Attorney General Soli Sorabjee was yet to forward his opinion on the matter to the government and maintained that the present conditions did not favour a revocation of former communication minister Jagmohan's hard stance on licence fee defaulters.

This has major ramifications for the companies in question as well as the cellular industry. Seven major circles including the potential high revenue regions of Haryana, Uttar Pradesh, Punjab will now be on the block.

A fresh round of bids inviting companies for providing cellular services in vacant circles is expected by the end of this year. Direct buyouts appear to be a remote possibility at the moment and are being hindered by the fact that these companies have lost the licences. In addition, their valuations have also taken a heavy beating as customers have migrated to the second service provider in these circles.

The department of telecom (DoT) has all along taken a tough stance on the issue of cancelled licences. In line with this stand, DoT had also proposed to terminate Koshika Telecom's remaining cellular licence for Uttar Pradesh (East) as a result of the company's failure to give an un-conditional acceptance to the revenue sharing package for this circle.

Earlier, DoT had terminated the licences of Evergrowth Telecom (Essar Telecom subsidiary), Aircel Digilink (ADiL) and Koshika Telecom in May this year for failure to pay up 20 per cent of outstanding licence fee dues. Subsequently, these disconnections were referred to Attorney General Soli Sorabjee for his opinion on whether the companies could be offered the new revenue sharing package.

The cancelled licences include Koshika Telecom for Orissa, Bihar and Uttar Pradesh (West), ADiL for Rajasthan and Haryana and Evergrowth for Punjab. In addition, DoT has already taken other action against Koshika including encashment of a Rs 84.61 crore bank guarantee.

The cancellation of the Koshika licence has been challenged in number of Courts as well as before the Telecom Regulatory Authority of India. TRAI after examining the issue had even called for all the files pertaining to the matter. That directive was the cause of a major fight between the DoT and the regulator, with the former petitioning the Delhi High Court.

A single judge bench of Justice MK Sharma of Delhi High court while staying the operation of the TRAI order posted the matter for further hearing to November 16.

In contrast, the Essar Group companies Aircel Digilink (ADiL) and Evergrowth Telecom have adopted a more cautious approach in taking the matter to the courts. Both the companies did not petition the TRAI. The feeling has been that given the terms of the new telecom policy, the licences of these companies would be returned.