In a major bonanza to over 37.5 million mobile customers, the Department of Telecommunications announced the introduction of 'number portability' in Delhi, Mumbai, Kolkata and Chennai.
Under this system, subscribers do not have to change their mobile phone number if they shift from one operator to another.
The facility will be available to mobile customers by the fourth quarter of 2008.
Communications Minister A Raja, who announced the decision at a press conference, said portability could not be implemented on a nationwide basis immediately.
The four major cities account for 18 per cent of the total mobile subscriber base in the country.
The DoT announcement comes nearly 20 months after the Telecom Regulatory Authority of India recommended a phase-wise introduction of number portability across the country.
Trai also mandated limited number portability by April 2007. But opposition from GSM-technology mobile players and state-owned telecom firms delayed the process.
Welcoming the move, Cellular Operators Association of India Director-General T V Ramachandran said, "Why is portability being announced only for mobile and not for fixed-line services?"
"It seems that mobile number portability was being introduced to benefit a select operator that wants to enter the GSM segment and thereafter poaching on the subscribers of existing GSM players," he added. COAI is a GSM lobby.
The Association of Unified Telecom Service Providers of India, the lobby for operators of the rival CDMA technology, said the decision is an important tool for ensuring improved quality of service.
The move is expected to increase the overall churn in the industry.
"The average churn in the industry is 3 to 4 per cent but with portability it could go up to 8 to 10 per cent. It is bound to impact incumbents who will lose some of their high-paying customers," said an analyst.