India’s largest mobile operator Bharti Airtel is tipped as the frontrunner to acquire smaller rival Loop Mobile, according to Economic Times.
According to multiple sources familiar with the situation, discussions have been ongoing for some time but have picked up momentum in the last few weeks.
However, any deal faces significant regulatory obstacles to completion.
Loop is the fourth-largest mobile operator in Mumbai with over three million subscribers, according to GSMA Intelligence (Q2, 2013 figures). Airtel’s current national base is in excess of 190 million subscribers.
The more significant attraction is Loop’s 8 MHz of spectrum in the 900 MHz band. Airtel holds spectrum in the 1800 MHz band in Mumbai. So does Idea Cellular, which has also been mooted as a possible buyer of Loop.
However, a number of regulatory uncertainties loom over any deal, namely that Loop only has another year before expiration of its existing licence. The size of any renewal fee for the licence is unclear.
Also, it’s possible that the government could choose to retain some of Loop’s 900 MHz frequencies and issue the operator with less attractive spectrum.
Mobile operators are also awaiting government guidelines on M&A.
Loop Mobile is owned by the IP Kaitan group