Indian IT and Communication Minister Arun Shourie told reporters of the move after the cabinet has approved a "unified license regime" for all operators.

He, however, said that no decision was taken on enhancing the foreign investment limit in the telecom sector to 74 per cent from the present 49 per cent not.

Fixed-line operators currently pay lower fees than mobile phone operators.

But they have started offering cheap, limited mobile services to customers, cutting into the profits of more established mobile phone firms.

The telecom regulator said a single licence and fee would prevent litigation between the fixed-line and mobile operators.

The policy decision is likely to pave the way for further cuts in rentals and tariffs transforming the dyanamics of the sector.

The telecom regulator had also recommended a fine of 4.86 billion rupees (100 million dollars) for the country's largest private group, Reliance, for violating the terms of its fixed-line licence by offering mobile services.

Shourie said the government would issue a notice to Reliance Infocomm.

"The draft of the notice has been approved by the cabinet," he said but did not give details.

India's telephone density is among the lowest in the world with only three fixed-line phones per 100 people, compared with the global average of 14.5.

However, the mobile phone sector in India is one of the fastest growing in the world and various government and private handset manufacturers estimate that India will have 100 million mobile users by 2007.