The stand off between the government and the TRAI is most unfortunate for the telecom sector. This could definitely have been avoided if administrators could decide on where policy framing by the government ends and where regulation begins. Policy has to be in terms of macro indicators -- for example, whether the country wants competition in the telecom sector. Even inthe issue of tariff fixation which has been the latest point of contention between the government and the TRAI, the government would have been well within its rights to give a broad framework for the TRAI to operate within and thereafter left it to the Regulator to rebalance the tariffs. The government could have said that local charges for calls and rentals should not go beyond a certain percentage. After that it was upto the TRAI to rebalance tariff within these parameters.

This is not difficult to do as, for instance, Australia has no time limit for a local call as this is perceived as being used by ordinary people. The Indian government could also have used such an approach to some specific tariffs.

It is not difficult to appreciate the government's concerns. For example while the government's concern for local rental andlocal call tariff hikes may be genuine, it cannot justify keeping cellular tariffs in abeyance because these affect only a small category of people. However, a vast majority of tariffs will have to be the regulator's responsibility. On the other hand, the government should also keep in mind the mandate they themselves have given to the Regulator. One understands that it is a new chapter in the Indian context and it will take time for administrators to get sensitised to this scenario, but steps which completely weed out the foundations on which the edifice of the regulator stands would irretrievably damage the sector which may not be able to resurrect itself in a long time.

Right now one is sceptical about what the NTP will unfold in the sector. But what one really hopes for is that it will contain proposals whichcreate an environment where there is sufficient commercial/financial/technical flexibility without compromising on the basic objective of attaining seamless communication network. In this one also has to keep in mind that a world class service should be at ``affordable prices'' which only when it will benefit people. And to that extent going through the licence fee route means that ultimately the burden of this will land on the subscribers through high prices of these services. The NTP should actually solve these problems even if it means taking tough decisions like reducing licence fees and throwing open the sector to more competition.

What one has to remember is that investments for every phone line are in the region of Rs 40 to 45,000. For breaking even for any service provider, economies of scale are required for operations to make economic sense. The challenge is to reconcile the need for more competition with the need to have adequate returns on the large investments required. This policy cannot workif there is no strong regulator to implement it.