Due to scarcity in spectrum, no more cellular licenses might be given by the Department of Telecom (DoT). It should be noted that DoT has sought the opinion of its regulator - the Telecom Regulatory Authority of India (TRAI) - on whether more operators should be allowed to enter the market; as a first step towards imposing a cap on licenses.

TRAI received a letter from DoT, which said: "In view of the fact that sufficient competition seems to be already in place and spectrum is a scarce resource and to ensure that adequate quantity of spectrum is available to licensees, to enable their services and maintain the quality of service, the Government is to take a view on the policy of no capping on the number of access service providers in each service area."

It has appeared that DoT will require closing the doors on about 24 companies whose applications for new licenses are pending with the Government, if it does impose a cap. In the year 2007, companies such as AT&T, Moser Baer, Sterlite Technologies and the Hinduja Group had filed their applications; however, since DoT changed the cut-off date from October 1, 2007 to September 25, 2007, they were not given licenses.

It should be noted that after the Delhi High Court quashed the decision by the Ministry of Communications to leave out applications submitted after September 25, 2007; these companies had recently got a reprieve.

The High Court, while stating the change in the cut-off date as arbitrary, said that DoT cannot be permitted to arbitrarily change the cut-off date and that too without any justifiable reason.

"The court had observed that, on the one hand, DoT had accepted the telecom regulator's recommendation of not putting a cap on the number of mobile players, and on the other, it acted contrary thereto by amending the cut-off date and placing a de facto cap on the number of service providers," said source who didn't want to be named.