The police busted a "pseudo Naxals gang" with the arrest of P Ganapathi and K Anil Kumar Reddy who used to pose as members of Telangana state committee of the the banned CPI (Maoists), an official release said.
They had made anonymous extortion calls to businessmen and film stars, among others, police said.
Additional deputy commissioner (special operation team) E Ramchandra Reddy said the two were arrested in the area under Gachibowli polices station.
Ganapathi, a commerce graduate, hailed from West Godavari district of Andhra Pradesh and worked at a hotel.