The Indian market leading operator Bharti Airtel is believed to be in discussions to buy a smaller rival operator, Loop Mobile.
Reportedly discussions have advanced in recent weeks, but there could well be regulatory hurdles to a proposed acquisition.
Loop operates in Mumbai, where it is the number four player with over three million subscribers. Currently, Airtel has a national subscriber base of over 190 million.
The key attraction for Airtel is that Loop holds 8MHz of spectrum in the 900MHz band. In the Mumbai circle, Airtel only holds spectrum in the 1800MHz band – much like Idea Cellular, which has been suggested as a potential alternative buyer for Loop.
However, there are potential complications for any buyer, as Loop’s licence is only valid for one more year and the cost of renewing it has not been clarified. In addition, the government could keep at least some of the 900MHz spectrum and instead issue a replacement licence covering different frequencies.
Currently, India’s Department of Telecoms is revising the regulation concerning mergers & acquisitions, with operators – including Telenor – reluctant to commit to any deals before the rules have been finalised.