Local call rates are less than 1 US cent a minute, and local operators want to implement the same style of model in 3G.

"In India tariffs have to be where Indian tariffs are," said Sunil Mittal, chairman of top mobile firm Bharti. "The idea in India is to provide telecom services at most affordable rates."

3G IS NOT EASY

The low-cost plans will be a challenge given 3G has been associated with high-tariff structure globally, as new operators have to put up billions of dollars for licences and networks.

India has set a base price of 20.20 billion rupees ($435 million) for a national licence. Actual bids are expected to be higher, especially in lucrative centres such as Mumbai and New Delhi, as the government is looking to raise up to $9 billion.

Foreign telecom firms not already in the Indian market will also have to fork out 16.5 billion rupees ($355 million) for a telecoms licence, which the existing operators already have.

"It is not going to be a cakewalk. It will be kind of a Catch-22 situation. You will have to spend so much, but you can not pass on in the same proportion," said Gartner's Gupta.

"At the end of the day, price will matter."

Importantly for new entrants, a winning 3G bid does not automatically get a bread-and-butter 2G licence.

T.V. Ramachandran, an official at a mobile operators' association, COAI, says new foreign operators will have to look for an Indian partner that owns a 2G network.

... contd.