Cellular industry's hopes for a compensation in lieu of unified licence may be dashed with the Telecom Regulatory Authority of India finding no merit in it since the cellular operators have already been given sops over Rs 30,000 crore (Rs 300 billion).

"There is no merit in their demand," Trai chairman Pradip Baijal told PTI in New Delhi.

Cellular operators' argument that they should be compensated for allowing basic operators to offer limited mobility or full mobility by unified licencing regime is not tenable, he added.

"As pointed out in the recommendations of Trai, cellular operators were given a relief of over Rs 4,500 crore (Rs 45 billion) [net present value] by migrating from fixed licence regime to revenue sharing. Apart from this, the revenue sharing was reduced for cellular operators while permitting WLL mobile services, which had resulted in a relief of Rs 15,000 crore (Rs 150 billion)," Baijal said.

Baijal was responding to queries on the reports that cellular operators would seek compensation from government, totalling Rs 18,000 crore (Rs 180 billion).

He, however, said the unification of licences would lead to consolidation of the industry and mergers and acquisitions were on the cards in the coming years.

While announcing the government's decision to move to a single licence regime for both basic and cellular mobile services, Communications Minister Arun Shourie had said the ministry of finance would look into the issues raised by the cellular operators.

One of the demands of the cellular industry is permission to recast their debts on the lines of textile and steel industry.

Cellular industry has been demanding government's permission to recast their debt as this would result in huge saving with regard to interest outgo.

Baijal said that while allowing mergers and acquisitions in the industry enough precautions have been taken and it has been ensured that there was no monopoly-like situation.

"Under no circumstances the number of operators would be less than three in any circle," he said.

Cellular operators were permitted to retain five per cent of pass through revenues paid by basic operators and were allowed to offer fixed services using their GSM infrastructure, he added.

They were also permitted to offer mobile PCO services.

Considering the concessions given to cellular operators from time to time and the fact that they had agreed to unlimited competition, Trai has not recommended any further concessions to be given to the industry.

According to sources, the cellular industry has already invested about Rs 25,000 crore (Rs 250 billion) of which as much as upto Rs 15,000 crore is the debt component and various small operators have been reeling under debt burden and not been able to meet obligations with the financial institutions.