India’s Economic Times reports that state-owned operator BSNL plans to cover over 700 cities with 3G services by June, up from around 12 cities at present. The operator has previously estimated it will spend US$542 million on the new infrastructure. Meanwhile, TeleGeography notes that fellow state-run operator MTNL will reportedly soft-launch its 3G network in Mumbai by the end of next month, having announced a commercial launch in Delhi last month. However, such progress has been overshadowed by reports today that the country’s Department of Telecommunications (DoT) has asked both operators to halt 3G services until security agencies further investigate video call tracking functionality.

Both BSNL and MTNL are currently the only Indian telcos to offer 3G services in the country; despite the ongoing 3G spectrum auction delay, BSNL and MTNL have already been allocated one block of 2x5MHz each in every Indian circle with the exception of Rajasthan (which will have no 3G spectrum available at all). BSNL and MTNL will both eventually be required to pay a license fee equivalent to the highest price paid in the private auction. In separate developments, late last week it was announced that India’s telecoms ministry has selected US firms Syniverse and Telcordia to run mobile number portability services, due for national launch later this year.