Reliance Communications announced a fall in profit for the third quarter of 2011, amid reports that it is close to finalising the long-anticipated sale of its towers business.

According to the Times of India, the operator, which is the second largest in the country after Bharti Airtel, is in talks with a consortium of private equity firms Blackstone and Carlyle to sell Reliance Infratel, with a transaction likely to take place in December 2011. With the assets expected to have a value of around US$3.5 billion, it will also make it India’s largest private equity deal to date.

It was suggested that Rcom may look to close a tower sharing deal with Reliance Infotel, a separate company which holds a broadband wireless licence in India, ahead of the sale, which would make the infrastructure unit a more appealing business.

Carlyle has been linked to Reliance’s towers unit before, alongside several of its counterparts, as Rcom looks to cut its debt. Reliance Infratel was also set to be merged with GTL Infrastructure as part of a US$11 billion deal, although this fell through in mid-2010.

For the quarter to 30 September 2011, Rcom announced a net profit of INR2.52 billion (US$50.3 million) down from INR4.46 billion in the prior-year period, on operating revenue of INR47.92 billion down from INR50.23 billion.

It said that its Wireless business unit saw a pre-tax profit of INR5.57 billion down from INR7.13 billion, on revenue of INR44.17 billion, compared with INR41.61 billion. In a statement, it said that its “focus on ‘quality of operations’ continues through driving quality of customers, minutes and portfolio.”

According to Bloomberg, the company’s profit did not fall as much as some analyst expectations, although revenue came in below the forecasts.

Rcom said that it had generated operational cash flow of INR16 billion in the quarter. Following the payment of its 3G auction fees and “with peak capex behind us,” this is the full year of positive free cash flow for the company, and “the trend will continue and in succeeding years.”

The operator signed a deal earlier this year with the China Development Bank to cover its spectrum fees. This also included a provision for the sourcing of equipment from vendors Huawei and ZTE.