The government on Friday set the ball rolling for introduction of next generation (3G) mobile services, as also mobile number portability that would allow users to switch operators while retaining existing numbers.

Foreign players too will be allowed to compete in the 3G space.

The new guidelines for 3G spectrum provide for a reserve price for availing of radio frequency. The price for a 2x5 Mhz block of spectrum for Mumbai and Delhi and category-A shall be Rs 160 crore (Rs 1.60 billion) and for Kolkata and category-B Rs 80 crore (Rs 800 million) and for category-C Rs 30 crore (Rs 300 million).

The government has also decided to allow up to 10 players in the 3G space, including eligible foreign players.

The guidelines for mobile number portability, also released by the government on Friday, proposes dividing the country into two zones for implementing the scheme that is prevalent in most mature telecom markets.

The 3G spectrum will be auctioned in 450 mhz band, 800 mhz and 1,900 mhz and the guidelines exempt operators from paying any annual fee in the first year of operations.

Operators, however, shall be liable to pay an annual spectrum charge of one per cent of AGR after a period of one year.

All those who hold a Unified Access Service Licence or those who are otherwise eligible for obtaining UASL as per DoT guidelines of December 14, 2005 would be eligible to apply for 3G radio waves.

As per the guidelines, "the applicant company shall have a minimum paid-up capital of Rs 10 crore (Rs 100 million) on the date of application. Foreign equity shall be subject to extent guidelines and regulation. However, equity of foreign partner in the company shall not be less than 26 per cent."

On MNP front, the guidelines said a one time non-refundable entry fee of Rs 1 crore (Rs 10 million) is required to be paid for securing the service license.

"No single company/legal persons/MNP license applicant or MNP licensee company, either directly or indirectly, will have any equity in any of the telecom service provider and vice-versa," the guidelines said.