* Court rejects Sistema, Idea, Videocon, Tata Tele appeals
* Case has sparked diplomatic row with Russia
* Sistema unit must bid in new auction to maintain services
(Adds Sistema statement, detail, background)
NEW DELHI, Feb 14 (Reuters) - India's top court on Thursday
upheld a decision to revoke the operating licences of several
mobile phone companies after police said the sale of the
licences was tainted by corruption.
Four companies had appealed against the Supreme Court's
decision a year ago to scrap 122 permits sold in 2008.
Police say some of the companies colluded with government
officials to side-step competitive bidding and acquire licences
for less than their fair value.
Eight carriers including the local subsidiary of Russia's
Sistema and Indian firms Idea Cellular,
Videocon Telecommunications and Tata Teleservices, were affected
by the court order.
None of the four companies were accused in the case.
A state auditor said as much as $33 billion was lost to the
government because of the lack of competition in the tender.
The resulting scandal deepened a crisis of confidence in
India's government and the permit cancellation order led to a
diplomatic row with Russia, whose government owns 17 percent of
Sistema's Indian unit and has pressed India to resolve the case.
An Indian former minister and several corporate executives
are on trial over the scandal.
On Thursday, Sistema's Indian unit, Sistema Shyam
TeleServices, called the rejection of its appeal "unfortunate"
and said the company's shareholders would decide its future
It had pinned its hopes on the appeal and must now bid in an
auction due in March if it wants to continue serving the world's
second-biggest telecommunications market by customers.
Sistema Shyam, Idea Cellular, Videocon and Tata Teleservices
had filed separate petitions in the last stage of appeal
available in Indian law.
The court ruled that none of those petitions were valid.
Sistema Shyam uses the less popular CDMA technology and had
argued that its case was different from the others because there
had been no competition for CDMA airwaves in the 2008 sale. It
said most bidders were interested in GSM services.
For now, none of the companies have been forced to withdraw
services because of the top court's ruling last year.
Idea Cellular has already bought airwaves in seven zones
where its operating permits are due to be scrapped. Videocon,
which is to lose 21 permits, has won back airwaves in six of
(Reporting by Devidutta Tripathy and Suchitra Mohanty; Editing
by Tom Pfeiffer)