NEW DELHI, JULY 23: Indian telecom firms and the ailing sector's regulator said on Friday they were unhappy with a key condition in a bailout package offered by the government.Executives and regulatory officials also feared that the regulator's powers would be diluted if the package was accepted. "Our dispute settlement powers are naught. It (the bailout package) virtually means our powers will cover just setting tariffs," S.S. Sodhi, chairman of the Telecom Regulatory Authority of India (TRAI), told Reuters.The package, formally announced on Thursday, offers ailing companies an option to pay a percentage of their revenues to the government rather than the current annual fixed licence fee.Since the Indian telecoms market was opened up in 1994 many operators, who overestimated demand for their services, have battled to profit from the business and pay their licence fees. There are about 28 private licence holders offering cellular and fixed line services in India.The companies say the bailout package would be largely acceptable but for one condition. The Department of Telecommunications said the package was conditional on telecoms firms withdrawing all legal cases they have filed against the government.A number of telecoms operators have taken the DOT to court over delays in regulatory clearances and moves by the department to cancel their licences because of a non-payment of fees. The cases include an appeal against a Delhi High Court judgment last July diluting the adjudicatory powers of TRAI.The regulator has not taken up any dispute settlement cases between private telephone firms and the government since then. The Delhi High Court is yet to give its verdict in the appeal case although hearings are complete."We need this case to be decided by the courts. Of the $7.0 billion market, $6.6 billion is with state-owned providers. New (private) firms have to be protected against anti-competitive practices," a senior executive with a telecom company said.The DOT, Videsh Sanchar Nigam Ltd, India's international telecom carrier, and Mahanagar Telephone Nigam Ltd, the fixed-line telecom provider in Mumbai and Delhi, are the dominant players in the market.At a meeting with representatives of private cellular and basic telecom firms earlier this month, DOT officials refused to accede to the companies' request that this particular case be kept out of the bailout package. The meeting was one of a series of discussions between the DOT and the private firms to prepare the bailout package.AT&T India Managing Director Virat Bhatia said: "We are pleased that the government has offered the package. But, for both current and future investments, TRAI's powers and functions need to be clarified."The Indian telecom regulator has struggled to find its bearings ever since it came into being in January 1997. It has also run into skirmishes with the DOT over interpretation of the TRAI Act, 1997, the legislation governing the telecom regulator.
