India cancels 2G licenses

India’s Supreme Court cancelled 122 mobile telephone licences awarded in 2008 by Andimuthu Raja, the country’s jailed former telecoms minister, a move expected to trigger a radical shakeout of the industry.

The top court ruled that the licences, which are the subject of a high-profile corruption trial in New Delhi, be cancelled on the grounds that their award by the government was “totally arbitrary and unconstitutional.” It has requested that the Telecoms Regulatory Authority of India prepare for a fresh auction of 2G mobile telephone licences within four months. Analysts said that the ruling could have significant implications for India’s ailing mobile operators, who have been struggling to boost margins amid a price war among the country’s 15 operators. The judgment could force smaller companies affected by the ruling to exit the Indian market, benefiting bigger players such as Vodafone and Bharti Airtel.