The Department of Telecom plans to seek the Cabinet's approval in the next two months for the allocation of spectrum to state-run telecom firms BSNL and MTNL for 4G services, an official source said.

"The draft Cabinet note is expected to be ready in mid-October after which it will be floated for inter-ministerial consultation. Thereafter the DoT will approach the Cabinet with a revised draft note in November," the source said.

BSNL has submitted a detailed project report to the government seeking spectrum for 4G services in lieu of equity.

BSNL has sought Rs 6,652 crore as equity infusion from the government to fund its spectrum purchase worth about Rs 13,885 crore, according to information shared by telecom minister Manoj Sinha in Parliament.

BSNL chairman and managing director Anupam Shrivastava had earlier told that the corporation is seeking spectrum in the 2100 MHz band for all circles, except Rajasthan, where the company is looking for spectrum in the 800 MHz band.

MTNL Chairman and Managing Director P K Purwar requested the government to grant it 4G spectrum in lieu of equity worth around Rs 6,500-7,000 crore and extend its mobile licence which is expiring in 2019 till 2021.

Sinha in mid-September had said that survival of BSNL and MTNL without 4G spectrum is tough and the government is working on a strategy to settle issues that have emerged due to some decisions of the apex court.

"I will try by end of this year, it should not be in 2019 but in 2018, the government should decide on the allocation of 4G spectrum," Sinha had said.

BSNL has pan-India operations except in Delhi and Mumbai, while MTNL provides services in Delhi and Mumbai circles.

(Reported PTI)