The service was inaugurated by Prime Minister Manmohan Singh by receiving a video call from Telecom Minister A Raja, who was also present at the function.

Expressing concern over slow pace of broadband growth, Singh said: "I believe that 3G and Broadband Wireless Access will give a fillip to mobile broadband penetration.

"So far, India's success in extending broadband has not been satisfactory. These services were launched in January 2005 and till now we have managed a very modest penetration. I expect that 3G will become the predominant platform on which we will be able to build and deliver upon India's broadband objectives."

He also said that 3G and wireless broadband would bridge the much needed digital divide between the rural and urban India.

For urban India, 3G and wireless broadband will offer convenience of mobility with the rich multimedia content of the internet. "But it is in rural India that I hope to see them making an invaluable contribution," he added.

MTNL, a service provider in Delhi and Mumbai, would extend the 3G services in Mumbai by the end of next month.

Asked about the tariffs, MTNL Chairman and Managing Director R S P Sinha said that "we are still working on it.

But I can assure you that the tariffs would be affordable."

Sinha said that 3G services for MTNL subscribers would be free of cost for the first one month and the services would be launched commercially by January next year.

"We will offer our premium customers to take the 3G connection over their existing connections. We want them to get a feel of the service before we ask them to pay for it.

Once our network is complete we will make it available for everyone," he added.

Raja said that spectrum allocation through the auction process would be completed by January 2009 and hoped that services would be available from all private players by the middle of next year.

Government is expected to allocate 3G spectrum to at least five private players subject to availability of frequency in each circle.