"We will soon apply for licences for the basic operation. We believe that the telecom world will ultimately be ruled by convergence. Mobile and basic operation will form the right synergy for the existing mobile operators," Mr Kapoor told eFE.

Industry observers pointed out that most of the leading mobile operators in the country have applied for basic licences. In the West Bengal telecom circle, Reliance Telecom, BPL Mobile and Hutchison Max have applied for the licence. Reliance is already the cellphone operator in West Bengal circle, while Hutchison operates in Kolkata under the brand Command.

In the West Bengal circle, the licence fee is Rs 25 crore with a bank guarantee of Rs 100 crore. "Our investment will be around Rs 600 crore in the three circles which will include the licence fee and the implementation cost," Mr Kapoor said.

He said Spice will opt for CDMA or code division multiple access technology in the basic service.

With cellular operators in the fray, industry observers believe that the telecom consumers will enjoy enormous benefits in terms of pricing.

Mr Kapoor pointed out that Spice Cell users will be able to make long-distance calls from any point in West Bengal at much lower rates than now because there will be no need to share revenue with Bharat Sanchar Nigam Ltd, as Spice has to do now.

However, Spice Cell has not decided which network it will use. "There will be plenty of choices available in the next two years. With Reliance Infocom and other players investing in optic fibre network, it will be pay and use service for the basic operators. We will not be depending only on BSNL network for the basic service," Mr Kapoor said.