Determining the revised licence fee: The industry representatives present at the meet felt that the licence fee should only cover the costs of issuing telecom licences and regulating the sector, as it would lead to a lower subscriber prices and expansion of services.

However, according to MTNL comments given in the synopsis of the consulting paper issued, the licence fee should also cover the cost of USO and the element of rent because it will help the government recover the depreciated value of the investment on the common facility extended to operators and the diminishing availability of the frequency spectrum.

T V Ramachandran, director general, Cellular Operators Association of India (COAI) countered this by pointing out that rent goes against attracting investment for this sector and reduces net investment surplus: "While determining a revenue share as licence fee, the Government should keep in mind that the tariffs should be kept low and that it ensures an adequate return on investment and a level playing field for all the players".

As far as USO was concerned, private telecom operators were of the view that a separate `Universal Access Levy' should be charged instead of including it as part of licence fee, because "USO is a very complex process, which requires separate consultation with parties involved."

Basis for determining revenue share percentage: According to P K Roychoudhary, advisor, TRAI, a 5 per cent of the revenue share should be charged as licence fee. And unused surpluses in this fund may be transfered in later years to the USO fund. However, the COAI felt that it should be fixed on the basis of the bankability of the project, predictability of environment, technological changes, and competition.

According to the telecom operators, the consequence of fixing revenue as licence fee for shorter period will not give the predictability that the investor needs. "The way we are changing tariffs in this sector is very worrisome. We must allow at least 12 months to elapse from that last tariff change, which happened in November to allow some predictability/certainty", said Ramachandran.

TRAI countered this by saying, while the regulator can fix the upper limit of the tariff, but what the market forces the operators to do cannot be predicted.

Distinguishing metro from circle operators for levying revenue share: According to Roy Chowdhary, metros and circles have to be separately considered. COAI also said that since India is a very large and complex country, one can not take a view that fixation can be uniform. He also said that not all metros can be put in one category.

COAI also said that government operators, like MTNL and DTS, who have a cost advantage, should provide services in places like Jammu and Kashmir and Andaman and Nicobar Islands, where cellular mobile services do not exist. Especially for DTS, it should be made mandatory for it to provide services in these places.

Entry fee and fourth operator: According to Roy Chowdhary, one-time entry fee should be levied to eliminate non-serious offers and to meet initial costs of the selection and setting up process. Ramachandran said that the lock-in period is not with the spirit of the time since one needs to be sure about the commitment. Other industry representatives also felt that if licence is allowed to be tradable, it would be easier to get financial closure.

To ensure a level playing field, the public operators, who now want to become cellular operators should be made to pay a floor price, to ensure that cross-subsidization does not occur. However, TRAI claimed that since it is confident it can spot situations of cross-subsidization, there should be no question of floor-price, which seems anti-user.