Trai has asked the department of telecommunication to 'keep in abeyance' the grant of new 2G (mobile) licences till the watchdog finalises its recommendations.
It has, however, said that only if the court grants, then the DoT could go ahead with issuing more licenses.
The regulator plans to bring out a comprehensive list of recommendations on issues such as capping the number of service providers, allocation and sharing of spectrum, and pricing of spectrum.
Trai's latest move is likely to seal for the time being the fate of 343 applications that have been submitted between September 26 and October 1, 2007.
So far, the DoT has issued licenses on those applications which were submitted on or before September 25, 2007. It has issued 122 licences which included real-estate and technology firms with no telecom experience. A total of 575 applications have been filed by 46 companies till October 1, 2007.
"Sufficient competition seems to be already in place and spectrum is a scarce resource," the government had said in a letter to Trai recently, asking the regulator to revisit its earlier recommendations on no-cap policy.
Trai's final recommendations are likely to take time as it would have to consult all the stakeholders.
Trai's proposal puts cold water on plans of AT&T which had NLD and ILD licenses and is interested in acquiring licence for all of India's 22 telecoms zones.
Others in the queue include firms like JSW, STel (in some circles), Sterlite Industries, Ispat Industry, Cellebrum.com, real estate firm BPTP, Avinja Properties, Bhubaneswar IT Park Developers among others.
Replying to the DoT, Trai said, "since the Authority is undertaking a comprehensive exercise on these issues, the department of telecommunications may keep in abeyance the grant of any new access service licence, till finalisation of these recommendations and decisions thereupon by the government."
Trai has, however, cautioned the government that it must 'take cognisance of any order or direction given or to be given by any court of law as regards grant of any access service licence' in the meantime.
The DoT letter to Trai had mentioned that in 2007, the government had accepted the recommendation of the regulator of not imposing a cap on the number of service providers, but that there has been 'a spurt in the applications of telecom companies' since then.