The move will allow cell phone users in India to continuously make and receive calls while traveling outside the geographical constraints of their home network by using a visited network.

The merger will not only help in getting more subscribers but less service areas will also help increase traffic, boosting revenues of the sector, according to a note by India’s Department of Telecommunications (DoT).

However, Indian mobile phone companies, who jointly garner around $2.71 billion annually from roaming charges, are likely to oppose any move to do away with it as this fee constitutes up to 10 percent of the industry’s revenues.

The DoT’s core team, which was constituted to make recommendations on strategic issues related to licensing matters, in its draft report recommended that there should be an option to merge certain service areas.

Though the sector regulator — the Telecom Regulatory Authority of India (TRAI) — will be asked to work out the modalities for this, no timeframe has been given for the implementation of the new proposal, which is at a preliminary stage and is being discussed with the industry.

According to sector experts, the proposal, which is conceptually a good idea, will face many issues to be resolved before it can be implemented.

They doubt that the DoT, which currently gives spectrum — the frequencies on which all mobile services are currently delivered — on a circle basis, will be able to provide enough spectrum to give on a zonal or a national basis if it changes the licensing regime.

“Authorities may also have to work on resolving inter-connection-linked issues, which are quite complex,” said one telecom expert.“Secondly, with roaming tariffs in the country being already quite low, undertaking such a complex shift may not be desirable.”

New industry players are likely to benefit more from such a move as they will be able to set up just one switch and start offering services across the country.

In a separate development, the DoT’s failure to award additional second-generation spectrum for close to two years has drawn the attention of the Prime Minister’s Office, which has sought an update on this issue, according to Economic Times.

In early 2009, the DoT had put on hold all allocations of additional airwaves to existing telecom companies as it sought to come up with a new methodology to award these airwaves.

But, a series of controversies, including many operators expressing unhappiness over TRAI’s proposals for changing the current allocation policy, has resulted in the communications ministry being unable to finalize a new methodology to distribute these airwaves.

Meanwhile, more than 100 applications from existing telecom firms are pending before the DoT for additional airwaves.

The PMO, in an October 5 communication to the telecom department, has sought a “factual report” on the 2G allocation process, reported ET.

The Delhi circle, with 17 applications, has the maximum number of pending requests for 2G airwaves followed by Bihar with nine, it added.