Private equity investment in the country's telecom sector is likely to surge next year with the introduction of 3G services and rural penetration by telcos, experts say.

Analysts believe as operators roll out 3G services by next year, the telecom infrastructure and mobile value added services will see more PE deals materialising in the sector.

"As new operators come on board, spending on downstream or ancillary operations like mobile value added services (VAS) and tower infrastructure would be increased," Venture Intelligence Chief Executive Arun Natarajan said.

So far this year, the Indian telecom industry witnessed PE investments worth over $300 million through 11 deals.

The PE firms are now actively scanning for "downstream" opportunities, including mobile VAS, telecom software.

"While the industry will continue to provide attractive returns that PE investors seek, the landscape is likely to remain dynamic and somewhat uncertain over the foreseeable future from market, regulatory and industry perspective," KPMG feels.

According to a Venture Intelligence survey of over 50 PE and VC firms, investors seem to feel expansion of mobile telecom services into semi-urban and rural areas will keep the industry in high-growth mode for the next several years.