India's top court Thursday ordered the Department of Telecommunications to cancel all the 122 mobile telecom services licenses it allotted after January 2008.

Allegations of irregularities during the 2008 allotment of the licenses and bandwidth has led to the arrest of politicians, former government officials and several industry executives.

A government auditor in late 2010 pulled up the department for giving 85 licenses--bundled with bandwidth to offer mobile services--to companies which didn't have the required capital.

Some other license holders have also been issued notices for not meeting service launch rules.

The court's decision could bring a financial windfall for the government, as it could withdraw and auction the bandwidth allotted with the licenses--as the telecom regulator had earlier suggested--and use the money to cut its fiscal deficit.

India raised $22 billion through bandwidth sales in 2010.

--By R Jai Krishna, Dow Jones Newswires; +91-9967586928; romit.guha@dowjones.com

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