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The industry had made the projections, looking at the middle class and pathetic state of the fixed line network and expected high usage. But the reality is different and revenues harder. It has turned out to be a price sensitive market, with little understanding of value. The tendency is to go for the cheapest.

In India, there is no phone habit. It may be because it is difficult to make a phone call. In UK or Hong Kong, people don8217;t have to think about phoning parents, relatives or friends. They just dial. Then, there is a perception here that mobile phones are expensive. It is seen as a toy for the rich. But the companies are not to be blamedfor that. If a handset, which is available abroad for 110-115, costs over Rs 9,000, it is only due to the high import duties.

As a result of all this, we are facing a serious cash flow problem at the moment. In such a situation, the companies have to look towards the government. The industry is seeking a two-year moratorium on payment of licence fees and extension of the licence from 10 to 15 years to improve the situation. This will help strengthen investor confidence. It is not a stupid thing because if the industry has goofed-up in its projections, the government must come forward to create a lower risk environment for the industry to flourish.

When the companies start doing well, they will pay the government crores of rupees as import duty, service tax, sales tax and octroi. It will be a win-win situation for everyone. The industry was looking forward to the Union Budget for this, but it did not deal with these problems. In fact, there was nothing in it on us. Now, the industry is hoping that thegovernment will deal with these issues shortly.

And while it is true that some companies, such as ours, are operating in more lucrative areas, this is a somewhat narrow view of the situation. We have a higher revenue per subscriber a month in Punjab and Karnataka as against many other service providers. While it is Rs 1600-1700 in Punjab and Rs 1200 in Karnataka on an average, these figures can be really misleading if looked at in isolation.

The real picture will emerge if you these put these figures the high license fees and analyse the situation. Then, you will realise the need for concessions. It is easy to say that they all want sops. But there has to be a return on investments.

The author is the managing director of Spice Telecom, a joint venture between Modicorp, Motorola of the US and Distacom Communications of Hong Kong