The 3G service will not only allow much faster communications but also a wide range of applications such as high-speed net access, video calls, fast music and video downloads, interactive gaming and global positioning over internet.
"Spectrum in 2.1 GHz band will be allocated for 3G telecom services throughout the country," Raja told a press conference here, adding some 60 MHz of spectrum was available for wireless telephony in the country.
"We may give licenses to up to 10 operators. It depends on the availability of spectrum. Initially, we will have five players. In Delhi and Mumbai, there will be two operators only. The validity of the license will be 20 years."
He said a reserve price of Rs.1.6 billion ($40 million) had been fixed for Delhi, Mumbai and all 'A' category circles, half that for Kolkata and 'B' category circles and Rs.300 million ($7.5 million) for category 'C' circles.
The base price would add up to Rs.28 billion for an all-India licence and the government expects to earn more than Rs.300 billion ($7.5 billion) from the auction of spectrum for 3G services.
State-run Mahanagar Telephone Nigam Ltd (MTNL) that provides telecom services in Delhi and Mumbai, and Bharat Sanchar Nigam Ltd (BSNL), which caters to the rest of the country, need not bid for spectrum but have to pay the highest price.
Raja said his ministry was also in talks with National Security Advisor M.K. Narayanan, who has been entrusted with the task of finding out how much of the spectrum available with the defense forces can be used for civilian purposes.
"Once the armed forces release spectrum, we may accommodate more operators for 3G services."
Global telecom companies and new entrants in the industry can also bid but they will have to pay an entry fee for the cost of a telecom license over and above their bid price for the spectrum auction.
"We welcome the government's announcement of its 3G policy and believe this will benefit the entire wireless communications ecosystem," said Kanwalinder Singh, president for India operations of Qualcomm - a major player in 3G industry.
"3G will bring efficient voice and rich data services to Indian consumers."
The first 3G networks were rolled out in Japan in 2001 and since then, over 71 countries have adopted some form of the technology.
Many mobile phone subscribers in India - who number 286.86 million today - have been keenly awaiting the launch of 3G services.
Bharti Airtel, India's top mobile operator, said on Wednesday it would launch Apple Inc's third-generation iPhone in India on August 22. 
