In a note put up to the Prime Ministers Office, DoT has said that the Telecom Regulatory Authority of India (Trai) should be vested with the responsibility of devising a comprehensive revenue sharing scheme.

Sources said that the PMO would also consult the ministry of law and the department of revenue before placing the proposals before the union cabinet this week.

Sources added that the DoT is believed to have suggested the implementation of revenue sharing from the second quarter of the current fiscal. While the exact date of implementation of revenue sharing could not be known, Government sources said that the cut-off date would be after June 30, 1999, but before October 1, 1999.

The Trai on its part will be asked to devise an entire package including the percentage of revenue share, a one-time entry fee andthe modalities of entry into both vacant and existing circles. The Trai will have to arrive at the decision after consulting with private operators as well as the DoT.

DoT has said that the basic and cellular licence holders will have to clear all the licence fee dues upto the cut-off date, but suggested that they be given six months time to clear the dues. Only those companies that clear all their dues will be allowed to migrate to revenue sharing. In addition, the extension in effective date will be applicable to the companies who opt for revenue sharing.

Sources said that the DoT would ask companies to pay up 20 per cent of all dues accrued till the cut-off date and securitise the remaining 80 per cent via bank guarantees. Sources said that automatic migration to revenue sharing would only be possible after the company cleared previous dues. In the event of default, the company will not be allowed to switchover.

However, the existing fixed licence fee payment structure will also be retained in anattempt to provide an alternative to operators. Though the modalities of revenue sharing will only be decided by the Trai, the DoT is of the opinion that deciding the date was a matter of policy and thus could not be left to the regulator.

While industry has demanded one-year extension, the DoT has only offered a six month relief citing operational and revenue constraints. In addition, the DoT has said that operators will have to withdraw all court cases on the issue of licence fee clearances. A number of opearators, in the past have moved the Trai and courts on a variety of issues.