|India's former telecoms minister, A Raja, is awaiting trial over widespread corruption allegations [AFP]
India's supreme court has revoked all 122 telecoms licences issued under a scandal-tainted 2008 sale, plunging the mobile network market of Asia's third-largest economy into uncertainty.
Thursday's ruling is a setback for Manmohan Singh's government, which oversaw the sale of the licences at below-market prices, costing the exchequer up to an estimated $36bn in lost revenues,
The licences affected by Thursday's decision include those held by Unitech Wireless, the Indian joint venture of Norway's Telenor and Unitech.
The court said the current licences would remain in place for four months, in which time the government should decide fresh norms for issuing licences, a lawyer involved in the case said.
"We have been unfairly treated as we simply followed the government process we were asked to," the Telenor joint venture said in a statement.
"We are shocked to see that Uninor is being penalised for faults the court has found in the government process."
The telecoms scandal is the biggest of several to emerge during Singh's second term and set off massive street protests last year.
Two ministers, including former telecoms minister A Raja, who presided over the 2008 grant process, have resigned. Raja is in prison awaiting trial.
"This country is no longer willing to allow these corrupt corporations and these corrupt public officials to retain the benefits of their illegal and corrupt actions," Prashant Bhushan, a lawyer and petitioner in the case, said.
India is the second-largest mobile-phone market in the world by subscribers, with 894 million at the end of December, although the market is crowded with more than a dozen operators, making call rates among the lowest in the world.
Investors and operators have long been calling for consolidation in the crowded industry, and Thursday's ruling stands to benefit the country's biggest operators, including Bharti Airtel and Vodafone.
Stocks in telecoms companies, including Reliance Communications and Unitech, fell after the verdict, but shares in Bharti Airtel jumped.