Almost all the companies are expected to default at the end of the deadline on December 31. Anticipating trouble, they had been requesting the government for a two-year moratorium and doubling of the licence period from the existing 10 years to enable financial closure. The Sushma Swaraj-led telecom department decided to meet it half way with a five-year licence extension, but no moratorium.

The situation in basic telephony was no better with almost all the companies struggling to meet their rollout plan and licence fee commitments in the third year. Though Bharti became the first private sector provider of basic services inMadhya Pradesh in June, it found the going tough. Digging to lay cables, it hit obstacles of a nature which ought to have been sorted out at the policy stage itself, but weren't. The government took painfully long to sort out the problems, in a manner that affected the profitability of the companies, the industry claimed.

Hughes Ispat, too, managed to launch its services in Maharashtra in October-end after much anguish, while Reliance Telecom is still struggling with the ground realities in Gujarat. Both Shyam Telecom in Rajasthan and Reliance are expected to launch services in January, but a slow pace does not augur too well for infrastructure building in the country.

There is light at the end of the tunnel however, with the high-powered group on telecom having submitted its first report to the cabinet in recently. The report is believed to favour the idea that a broad spectrum allotment for providing a number of services is a better idea than the previous licence regimes for different services.

TheDoT is believed to have favoured replacement of the present duopoly structure in basic and cellular telephony with four players in each circle. The fixed licence fee structure too is expected to be replaced by the revenue-sharing method.

The group is now drafting a comprehensive new national telecom policy which will take convergence of the various media into account. Though it is expected to be announced early next year, it will be a while before all these measures translate into the companies managing financial closure and making huge investments already pumped into the sector viable.