The allegations are being investigated by government auditor CAG, and are the subject of a supreme court battle, due to start today.
CAG is said to have concluded that the decision not to pursue an open auction could have cost the government up to 1.72 trillion rupees ($38.41b).
India's 3G auction this year raised nearly $15 billion.
Opposition parties - including the AIADMK party which had been leading calls for Raja's resignation - welcomed the move but said the probes need to continue, the Hindu said.
In an interview with the Economic Times, Telenor CEO Jon Fredrik Baksaas said it should be up to its partner Unitech to clear the name of the Uninor JV, which is being investigated for its role in the process, but which Telenor only entered after the allocation had concluded.
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