India’s Central Bureau of Investigation (CBI) has stepped up efforts to bring to justice those alleged to have benefited from the country’s 2008 2G licensing scandal, by arresting Shahid Balwa, founder of DB Realty. Balwa is also founder of Swan Telecom, one of the operators accused of acquiring the licences on the cheap and then being acquired by an international operator. Swan acquired licences in 13 service areas for just INR15.4 billion (US$338 million) prior to selling a 45 percent stake to Etisalat for INR42 billion (the company was later renamed Etisalat DB).

According to a Wall Street Journal report, DB Realty said in a statement today that Balwa had been wrongly implicated in the case, and that he will strongly contest the CBI charges. The CBI’s latest move follows the recent arrests of Andimuthu Raja, India’s telecoms minister at the time the contentious licences were issued, and two of his colleagues.

Balwa’s arrest has heightened speculation that the CBI will target Uninor next. Formerly known as Unitech Wireless, the operator also acquired licences then sold a stake to a foreign investor – Norway’s Telenor. According to a Financial Times report, Telenor CEO Jon Fredrik Baksaas said the firm could be forced to reconsider its presence in India if the government revises the terms of its spectrum licence. “If there are changes to that agreement then of course we may be forced to rethink,” he said.

Meanwhile, in a separate development, Reuters reports that the Indian regulator is proposing large price hikes in 2G spectrum prices. It has recommended an increase in 2G spectrum at 1800MHz to INR17.7 billion (US$391 million) per megahertz for up to 6.2 megahertz, and to INR45.72 billion per megahertz for spectrum beyond that. It has suggested the new prices be made applicable retroactively from 1 April last year.