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Etisalat and Batelco lose Indian licences

All 122 2G telecom licences revoked in India over corruption allegations

The Indian government has four months to establish a process to re-issue licences for 2G services.
The Indian government has four months to establish a process to re-issue licences for 2G services.

India's Supreme Court has revoked all 122 of the 2G telecom licences issued in 2008. The court's decision means that the Indian joint ventures of UAE telco Etisalat and Bahrain's Batelco have lost their licences to operate.

The Supreme Court's ruling is the latest development in India's 2G scandal, which dates back to 2008, when former telecom minister A Raja issued the licences in a "totally arbitrary and unconstitutional" manner, according to the Supreme Court.

The court also directed the Telecom Regulatory Authority of India (TRAI) to make fresh recommendations on allocation of 2G licences, according to a report from the Times of India.

The Supreme Court said the current licences will remain in place for four months, in which time the government should set a new process for issuing licences, the report added, citing a lawyer involved in the case.

In October 2011 Etisalat denied any involvement in India's 2G spectrum scandal and said that it expected its Indian joint venture, Etisalat DB, to defend itself "resolutely" against charges from Indian authorities relating to the case. Etisalat entered the Indian market in 2008 when it acquired a 45% stake in Indian start-up Swan Telecom, for about $900 million.

Batelco entered India's telecom sector in January 2009 when it acquired a 49% stake in Chennai based S Tel for $225 million. Batelco sold part of its shareholding in S Tel in 2010 and now holds a 42.7% stake in the company. Batelco had already started to distance itself from its Indian operation and removed STel from its group results for Q4 2011.