"Over the last few days, leading FIs, both Indian and foreign, have approached the finance ministry and have asked them to pressurise the government, to protect the interests of cellular operators," said a senior official of a Delhi-based telecom company.

There are four issues bothering the banks, said an industry expert. Besides existing investments in companies, they are being approached by companies for funding roll-out plans, mergers and acquisitions, and the line of credit for the bidding for fourth operator. However, the banks are not secure about funding such strategic investments, as a cloud hangs over the valuations of existing cellular properties.

The stepped up activity follows in the wake of strong indications from Sanchar Bhawan that the Government will accept the Trai recommendations on allowing WLL mobility to basic operators. The cellular operators are feeling very nervous and isolated on the issue right now, as the government seems to be keen to push through, what it refers to as the "poor man's mobile phone."The government is expected to accept the Trai recommendations on limited mobility, in the next Full Telecom Commission meeting to be held on January 24. According to DoT sources, "Nothing can stop limited mobility, because political will is in favour of allowing people affordable mobility or the poor man's mobile service. We will accept the recommendations in totality."Meanwhile, even as Mr T V Ramachandran, director general, COAI, maintained that he is not aware that FIs have approached the finance ministry, he added that the "FIs are extremely dissatisfied with the uncertain regulatory situation."

FIs canvass the cellular cause with the Finance Ministry According to an industry analyst, "The FIs are feeling insecure about the policy flip-flops and are concerned that what is happening to the investments in the cellular industry, may one day happen in other areas, like basic services, too.''Another senior official in a multi-national cellular company also said that he would "not be surprised" if the FIs have approached the Finance Ministry with this request. "They would not be doing their job properly if they haven't approached the Government. In fact, I feel they should have done it sooner," he added.

Sources close to Birla-At&T-Tata combine also confirmed that FIs were quite nervous about the impact of the recommendations in the current and future line of credit. A consortium of 40 banks has invested in the combine. "Leave alone future investments, the financial closure of existing telecom companies is also in quandary," said a senior official from Escotel Mobile.

Meanwhile, Mr Umang Das, chief executive, Spice Communications, said, "FIs approaching the Government is a good news, because no one is understanding the issues involved. Only when the real pressures come and finance will not come, will policymakers realise the gravity of the situation."Meanwhile, Sanchar Bhawan officials say that the drop in cellular service tariffs, towards the end of the 2G (second generation) phase in the telecom market, is a worldwide phenomenon and the Indian cellular industry cannot escape this worldwide trend. "We have reached the end of 2G and the call rates and handset prices will start tumbling down. You can no longer market cellular as a premium service, in this phase," said a senior DoT official.

However, the mobile operators insist that they are not fighting a drop in prices or competition, but the fact, that they are not been offered the same terms and conditions by the regulator as those offered to basic players who can now offer WLL mobility. "What bothers us is that one set of mobile operators, will be governed by different rules," says Mr Asim Ghosh, who heads the operations of Hutchison Whampoa in India. "We can also provide mobile services at the same prices, provided you offer us equitable terms and conditions," said Mr Ramachandran.