Similar services are already available on aircraft registered elsewhere in the world. However, if the move is cleared licences could be issued to UK airlines as early as next year.
Ofcom believes access to voice calls, text messages and the ability to surf the Internet via a laptop or Blackberry would be a valuable inflight service.
It is, however, concerned that airlines should minimise the potential levels of annoyance from loud 'I'm-on-the-plane'-style conversations.
This could mean the introduction of quiet zones.
Ofcom said it wanted to 'create opportunities for companies to develop innovative technologies'.
In reality though, the move would allow airlines to cash in by heaping on extra charges to use mobiles at 30,000 feet.
Calls will be billed through passengers' normal service providers.
However, it is likely an international premium that could double or treble the normal charge would be applied.
Ofcom said aircraft would be fitted with an on-board base station. This would connect via a radio link to passengers' mobile phones and beam the signals to a space satellite.
These would be bounced to a dish on the ground and then directed into the landline and mobile mast network. The system would be reversed for calls from the ground.
Ofcom said the link would have to be switched off during take-off and landing to eliminate interference with terrestrial mobile networks.
The cabin crew would then switch it on once the aircraft reached a minimum height of about 10,000 feet.
Initially, the technology would work with second generation - 2G - phones which offer voice calls, texts and some, slow, web surfing.
If successful, it could be extended to 3G, allowing high-speed Internet access.
The services would be subject to approval by British and European aviation authorities.
Dubai-based Emirates already allows the use of mobiles on some of its flights, charging users around two pounds a minute - cheaper than onboard phones which start at around three pounds a minute.
Ryanair is keen to allow the use of mobiles from next July. Chief executive Michael O'Leary rubbished the idea that calls might disturb travellers. 'If you want a quiet flight, use another airline,' he said.
Consumer reaction has so far been largely negative. The consultation process on the plan will run until November 30.