Turmoil in India as 2G licences are cancelled

02 February 2012 |


The Indian Supreme Court has cancelled 122 mobile licences awarded in 2008 by the country’s now jailed former telecoms minister, Andimuthu Raja.

The Financial Times reports that the licences were cancelled in court on Thursday having been considered “totally arbitrary and unconstitutional”. The court also suggested that the Telecoms Regulatory Authority of India prepare for a re-auction of the 2G licences within four months.

Charges have been brought by India’s Central Bureau of Investigation accusing politicians and telecoms industry executives of a conspiracy in 2008 to award the 2G telecoms licences for significantly less than their true value.

Companies affected by the ruling include Uninor, a subsidiary of Telenor, and Etisalat DB. Telenor said it had “yet to review the ruling and will be able to comment further once we have had a chance to review it.”

An official audit at the end of 2010 estimated that the cost to the country, as a result of the previous rigged auction of mobile licences, was $39 billion.

The scandal surrounding the auctions has damaged the reputation of Indian prime minister Manmohan Singh’s government. It is considered one of the worst cases of corruption in the country’s recent history.