Bharti Airtel, India’s largest mobile operator, confirmed long-running media speculation by agreeing to purchase smaller rival Loop Mobile.

Under a deal announced today (18 February), the two operators will pool their resources to create the largest mobile network in Mumbai – one of India’s most lucrative ‘circles’ – with over 7 million subscribers.

Airtel did not disclose how much it will pay for Loop Mobile’s assets, but an earlier Reuters report said India’s number one operator could stump up INR3 billion ($48 million), as well as taking on INR4 billion of Loop’s debt.

In a statement, Airtel added that “definitive agreements” have yet to be signed and that the acquisition is still subject to regulatory and statutory approvals.

If the agreement does get the thumbs up from India’s authorities, Loop Mobile’s 3 million subscribers will join Airtel’s some 4 million subscribers in Mumbai.

The proposed transaction will bring together Loop Mobile’s 2G/EDGE enabled network (around 2,500 cell sites) and Airtel’s 2G and 3G network (over 4000 cell sites).

Airtel claimed the addition of Loop Mobile would offer subscribers in Mumbai “the widest exclusive retail reach” with 220 outlets.

Loop subscribers would also benefit, claimed Airtel, by gaining access to its “innovative product portfolio” and “superior services”, such as airtel money, VAS and domestic/international roaming facilities.

The agreement comes shortly after Airtel acquired Loop’s spectrum in Mumbai in a spectrum auction completed last week.