Indian mobile operator Aircel Cellular is reportedly in talks to acquire Loop Mobile, the Mumbai-focused regional operator, writes India’s Economic Times. According to sources familiar with the situation, the two operators have been locked in talks for around seven months defining the valuation of Loop, which is controlled by the Ruias of the Essar group. “Valuation has complicated the process… because market conditions have changed since the time talks started over seven months ago,” a source said. Industry analysts value Loop Mobile (previously known as BPL Mobile) at between INR1,500 crore and INR2,000 crore (US$300-400 million). Aircel, which is 74 percent owned by Malaysia’s Maxis, is reportedly looking at Loop Mobile as a strategy to enter the Mumbai market. According to Wireless Intelligence data, Loop Mobile had 1.9 million subscribers in the Mumbai circle by the end of last year. Economic Times noted that its high ARPU of INR300 (US$6) per month also makes it an attractive acquisition target.

Loop Mobile’s owners have reportedly been looking to sell the subsidiary for some time and have invested INR300 crore (US$60 million) in the unit over the last two years. However, a sale has been complicated by a long-running dispute between Essar and Vodafone over ownership of the firm. A sale is also seen as a way to fund the pan-Indian plans of Loop Telecom – a 100 percent subsidiary of Loop Mobile – which last year won a license to offer services across 21 circles. Like many of the other new licensees, Loop Telecom has been an acquisition target for foreign operators looking to enter the fast-growing Indian market. It was most recently linked with Zain, the pan-African and Middle Eastern mobile group.