AT&T is thinking about buying a 25 per cent stake in Reliance Jio Infocomm Ltd (RJIL), in a deal that could be worth as much as $3.5 billion.
According to a report by the Times of India newspaper, the US giant is looking at a deal with RJIL, an Indian operator controlled by Mukesh Ambani.
If it goes ahead, it would be the largest-ever foreign direct investment on the continent.
The potential target owns a 20MHz chunk of nationwide 2.3GHz spectrum.
Formerly known as Infotel Broadband, RJIL is gearing up to roll out 4G services in India by the end of the year, offering bundled packages of VoLTE and data.
Delhi and Mumbai are slated as the first cities for service launch, according to Times of India, with plans to extend to 69 cities by 2014 and over 800 by early 2015.
The same report says that Ambani has already splashed out $4 billion on licences and infrastructure, with another $6 billion lined up to launch operations over the next three years.
RJIL plans to break even by the end of the third year of its launch.
Should AT&T acquire equity in RJIL, it would herald a re-entry into the Indian mobile market for the US wireless giant. AT&T previously sold its stake in the Birla AT&T Tata venture, now known as Idea Cellular.