The Supreme Court (SC) on Thursday cancelled all the new 2G licences allocated by disgraced former Telecom Minister A. Raja in early 2008.
The apex court held that 122 new 2G licences were granted in arbitrary and unconstitutional manner.
The affected telecom service providers can operate the cancelled 2G licenses for four months.
The SC asked telecom regulator TRAI to make fresh recommendation on grant of 2G licences. Allocation of spectrum will be done through auction within four months.
Penalties of Rs 50mn have been imposed on Tata Teleservices, Unitech Wireless and Swan Telecom.
Videocon, Estel and Alliance Infratech have been fined Rs 5mn each. Essar-Loop and Systema Shyam Telecom have also been penalised.
Shares of DB Realty, Unitech, TTML, RCOM and Videocon Industries have taken a severe beating after the Supreme Court's announcement.
On the other hand, Bharti Airtel shares jumped amid speculation that it could benefit from the Supreme Court's verdict.
The 122 licences were given by A Raja for over Rs 90bn.
Among the 122 licences issued by him in January 2008 on first-come first-serve basis, Uninor was allotted 22 pan India licences, Loop 21, Sistema-Shyam 21, Etisalat-DB 15, S Tel 6, Videocon 21, Idea 9 and Tatas 3.
The judgement was pronounced by a bench comprising justices GS Singhvi and AK Ganguly.
The petitions on the issue was filed by NGO, the Centre for Public Interest Litigation (CPIL) and Janata Party chief Subramanian Swamy.
Telecom regulator TRAI said today that it needs to study today's Supreme Court judgement thoroughly before outlining the impact on customers.
It will urgently try to figure out how companies whose licenses have been cancelled should inform their subscribers about their future course of action.
India is the second-largest cellular market in the world by subscribers, with 894mn at the end of December, but call rates are among the lowest due to cut-throat competition.
This was a collective failure of the Government which overlooked the warnings given by the CAG and the CVC on the issue, the Janata Party chief, Dr Subramanian Swamy, said today.
“Everyone had warned including the CAG and the CVC but the Government overlooked it,” Dr Swamy said after the apex court's ruling.
"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," said Prashant Bhushan, a lawyer and petitioner in the case.
On prosecution of Chidambaram, he said: “I am very happy that the court has said since the matter is in the trial court and the matter has been reserved, the trial court is perfectly competent to decide on the matter whether the Home Minister should be proceeded against or not.”
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