Or would the government allow a successful bidder for a toll road to pay less to it each year if traffic projections went for a toss afterwards? No, it won't. After all, this is what the logic of the marketplace is all about. If a company cannot survive, it is allowed to go under.

So what's so special about the cellular phone operators in India who have been pleading with the government to grant them a two-year moratorium on license payments as well as to extend the validity of their licenses by five years? After all, like so many other sellers of luxury goods such as Ray Ban, Nike and Reebok,they too got carried away by the lure of the large Indian middle-class of 200 million-plus, and have painfully realised that the actual size is nowhere near this figure.

Put this to the cellphone operators, and they'll make two points. One, the problem they're talking about affects not just one or two companies, but extends to the entire industry (apart from more profitable metros like Delhi and Mumbai). Second, and this according to them is the real clincher, if these concessions are not given, the entire industry will turn sick, thousands of crores worth of potential investment will not take place, and India's potential telecom revolution will be nipped in the bud.

A few points need to be made here. For one, lots of industries such as the synthetic fibre one and, currently, the steel industry are going through a very tough phase but no one's bailing anyone out. The only solution being talked of is cost-cutting and mergers/ takeovers to create more viable units. Second, even if these concessions weregiven, what is the guarantee that this would make them viable, and that the government would be able to collect its annual license fees eventually?

A report and some recommendations, it appears, from ICICI. While few would doubt ICICI's competence, the point is that their projections are based on some assumptions about growth in demand for cellular phone services. But estimates of this demand were also made by lots of other well-reputed investment advisors for all these telecom companies just a few years ago, and each one of these went wrong.

There are also issues such as what changes in technology or the entry of new players will do to the profitability of cellphone companies. NEC of Japan, for example, already has plans to introduce -- through a tie-up with Mumbai-based Enkay Telecommunications -- Personal Handy-phone Systems (PHS) which are, for all practical purposes, cordless phones with a radius of 100 metres. More advanced variants of this are also being developed with receiving transmitters beingplaced in street lamps to give more mobility. These are not as efficient as cellular phones but are far cheaper. Then there's also the economical wireless-in-local-loop kind of phone being provided by MTNL in Delhi. To top it all, and this is agitating cellphone operators in Delhi and Mumbai, there is the very real threat of MTNL entering the fray and providing far cheaper cellular services.

What's most interesting, of course, is the way this bailout is to be packaged. Since the government doesn't wish to grant any such concessions directly as this will lead to all kinds of allegations about corruption, the case is to be referred to the Telecom Regulatory Authority of India (TRAI), a neutral and quasi-judicial body which is in charge of regulating the telecom sector. This body, it is being hoped, will be convinced of the arguments given by the cellphone operators and will grant them their concessions. The government which will, prior to this, swear to abide by the TRAI's decision, will then have to agree togrant these concessions.

Neat. But if you go by the spirit of the recent High Court judgment which whittled down the TRAI's powers, this matter is one that pertains to licence conditions between the Department of Telecommunications (DoT) and the operators and is not something that the TRAI has any jurisdiction over. The DoT had in fact gone to court on this very issue of whether the TRAI could sit in judgment on licensing issues. Obviously, then, the government wants to refer the matter to the TRAI because it suits them in this particular case.

That, however, is really ducking the issue which is of whether concessions should be given to one industry and the implications of this for other sections of industry. An issue which the government may also like to keep in mind is how to ensure that it gets a share in the profits of these firms when they finally become profitable. After all, if the government is being asked to give up revenue now there is no reason why it shouldn't get part of the additionalprofits that operators reap later from, say, selling the licence after a few years. Ironically, it was the cellphone operators who first came up with the idea of referring the matter to the TRAI as a means to avoid embarrassment to the government. The point, however, is that unless the government does some hard thinking on these issues, the entire operation will smack of a deal, even if done under the aegis of the TRAI.