"If the government wants to intercept messages, operators provide the bit string information. The government must develop the expertise to decrypt messages as encryption and decryption is its responsibility. Operator cannot provide text messages," said Rajan S Mathews, director-general of  Cellular Operators Association of India (COAI).

India has expressed concerns over the encrypted data through BlackBerry mobile phones and has been asking for a decryption solution for its corporate mails and messenger services.

"All the issues of BlackBerry except the enterprise mail have been resolved. But without the enterprise co-operation, which holds one part of the key, decryption is not possible," said Matthews.

RIM has to offer a solution for intercepting its BlackBerry messenger services by end of January, 2011. The Indian government had earlier extended the deadline to offer a final solution by December 31 for giving access to its messenger and enterprise services.

Calling for regulatory reforms, Mathews said profits of mobile telecom industry is likely to shrink further on account of strict subscriber verification norms and levy of charges on erection of cell towers by the state governments.

"Lack of infrastructure facilities in rural areas, coupled with stringent norms of customer verification before providing services, is a deterrent for mobile penetration in most parts of the country," he added.

In Delhi alone, the state government was charging $1,100 per tower until recently. "It has now further been enhanced to $11,000. These are going to kill our profitability," Mathews said.

"Net margins are currently at 8-10 percent. This may drop by two-three per cent. Some operators are already in negative," he said, referring to the telecom companies that are already incurring losses and warned that the situation may deteriorate further.

India, where $32.87 billion investments have been made into the industry so far, has a subscriber base of 700 million, according to the COAI data.

On the Telecom Regulatory Authority of India's recommendations to cancel licenses given to operators for failing to roll-out services, he said these recommendations would be followed by a thorough evaluation by the Department of Telecommunications.

"The DoT periodically evaluates a number of parameters. The issue (roll-out milestones) is one among them. We welcome any such evaluation. We, however, have not received any communication from the Department," he said.

"Don't hang us before conviction," he said, adding that the companies should be given time till the DoT makes a final evaluation on the issue. However, he refused to comment on the 2G spectrum auction scam, saying the matter was in court.

Downplaying the dangers of electro-magnetic waves emitted by the cell towers, he said: "We have conducted studies at various locations in different cities to ascertain the exact level of emissions from mobile towers. We found that the emissions are within the safety standards," he said.