India serves notices on telecom firms in scandal

India's telecom ministry on Monday began sending out notices to companies which allegedly suppressed information in order to win mobile phone licences or failed to roll out services as promised.

The operators are embroiled in what could be the country's largest corruption scandal, in which the sale of mobile licences and airwaves at rock-bottom rates in 2008 is estimated to have deprived the treasury of as much as 40 billion dollars in revenues, according to the federal auditor.

The ministry has started sending out "show-cause notices to some firms" asking them to justify keeping their licences, Telecom Secretary R. Chandrasekhar told reporters in New Delhi.

"We expect to complete the process in the next few days," he was quoted as saying by the Press Trust of India news agency.

The notices would be sent to some nine firms which received a total of 119 licences, PTI said.

Former telecom minister A. Raja is suspected of favouring companies and twisting the application terms to hand them licences at a fraction of their real value, though he denies any wrongdoing.

Raja resigned last month amid a political firestorm provoked by the investigation.

"We believe some of the companies might have suppressed facts, and might have got an undue advantage in accessing licences," Raja's successor Kapil Sibal said earlier in the month.

Sibal has said once the companies answer the notices, "we shall carefully consider their response and take a decision."

The telecom regulatory watchdog has recommended that dozens of licences be cancelled.

Prime Minister Manmohan Singh, seen as "Mr Clean" in India, has had his image sullied by the scandal after being asked to explain his "alleged inaction" over Raja by the Supreme Court.

Raja belongs to a small regional party that is vital for the ruling Congress party, which depends on its support in parliament.