Investors call this phenomenon as the explosion of the four greatest myths in the Indian context. These included the Indian familiarity with the English language, the 250 million-strong Indian middle-class market, a strong judiciary and a democracy which ensured political stability.Says an agitated foreign partner of a telecom company, ``well, the English language has been twisted in the licence agreement to suit the government-owned dominant operator -- the Department of Telecommunications (DoT); the middle class has not responded to the new telecom services as most market surveys had predicted priorto launch. The judiciary -- in this case being the Telecom Regulatory Authority of India (TRAI) -- first took two years to be constituted and soon after was rendered powerless. The only benefit of the democracy that we have seen in the four years that we have been here is that everybody on the polity is a decision-maker and yet the decisions never get taken.''

Four years after the wheels of privatisation were set into motion in the telecom sector, the number of cellular subscribers have stagnated at around one million for the past four months. While this may not be so disturbing if one consoles oneself that the industry has had a slow start, what is worrying is the fact that for the last four months not a single cell site has been put up and network roll-outs are at a virtual standstill.

Apart from this, only two operators have launched private basic services with some 5,000 to 6,000 subscribers on board so far. This is despite the fact that they spent nearly two years bargaining for ``assign-ability'' oflicences and signing of tripartite agreements between institutions lending money, the private operator and the DoT before signing on the dotted line in the Licence Agreement.

The blame for the present mess in the sector will have to be shared both by the industry and the government alike. While the private sector went into the business with their eyes open and signed commercial contracts, they have no business now to ask for sops from the government to bail them out of a downturn in business prospects. Further, these operators have been collecting dues from their subscribers with fervour. Why then are they now preventing the government to demand their dues?

The government, on the other hand, will also have to carry the cross as it took its own time to set up a regulator to play umpire between the new private players and the gigantic competitor in the form of the DoT which had a country-wide network as well as 20 million actual connections on the ground. In all fairness, for the kind of foreign investmentsthat India was looking for in building the telecommunications infrastructure, the regulator should have been in place and actually been a part of the process of privatisation.

Even when the private operators began running up huge outstandings in the licence fee payments, the DoT has allowed accumulation of these dues to an extent that now these run into Rs 3,741 crore.

The DoT cannot shirk its responsibility in adding to the mess in the sector by allowing different sets of rules to prevail for different companies -- while one was allowed to part pay its licence and have part bank guarantees for the outstanding dues, another company paid full bank guarantee covers.The net result of all this discrimination has been that for cellular operators, where two private operators are present in every state, the operator who has its licence fee payments on schedule has a couple of hundred crores ``extra'' to deploy in the field for either network expansion or for market development. These operators, who have so farhad a good track record in payments, now feel ``it doesn't pay to be too good''.

What is actually worrying now is the fact that despite the telecom sector being at the cross-roads, the government still has no short-term or long-term strategy to stem the decay. In October last, the Prime Minister had announced that the government would formulate a new Telecom Policy within three months after which a decision on the pending problems of the telecom industry would be taken in the right perspective.

Nearly four months after the PM's announcement, a draft policy has been put out, but this raises more questions than it answers. The draft policy does not address any crucial issues in the telecom sector without which any future investments in the sector are unlikely to take off. The new policy is sketchy in terms of any details and will require a lot more deliberation to fill in the gaps.

The government will have to set up its priorities if any progress in telecom is to be made in this country. The governmentwill have to decide if it wants to get involved in series of litigations with companies because this is what companies will do if the DoT threatens to take over their networks on account of non-payment of licence fees.

As it is the Himachal Futuristic experience has revealed that once matters go to court, any progress in the sector may be stalled for a minimum of four to five years. Further, the government will have to decide whether it wants competition to survive or whether the people in this country will have to depend on DoT/MTNL for telecom services in the next century also.

Once the government decides that its priorities include competition, the government will have to stop giving arguments like licence fee pledged by companies cannot be changed because these are commercial arrangements and constitutionally incorrect.

They can sit across the table with operators and tell them that pending dues will have to be cleared and prospectively moving to a revenue sharing arrangement can be madepossible.

The government can even put riders -- for example, in return of resolving issues, the operators would not be allowed to sell their equity stake for the next three years or even demand an equity stake in the companies to be part of the upswing in the companies' fortunes, whenever that happens.