India’s fourth largest operator Reliance Communications (RCom) and smaller rival Aircel, which have been in merger talks since December, reportedly will close the deal within the next month, completing the country’s first merger between local players.

The two operators are finalising the commercial and legal terms, the Economic Times reported. RCom and Aircel’s majority owner Maxis reportedly agreed earlier in the year to a 50:50 ownership structure if a deal was reached. The two operators last month extended the exclusivity period for talks by 30 days to 22 June, following “substantial progress”.

A merger would give the joint entity about 188 million mobile connections, pushing it ahead of current number three Idea Cellular, which has nearly 174 million connections, but slightly behind number two Vodafone India with 197 million. Market leader Bharti Airtel has about 250 million connections. RCom has nearly a 10 per cent market share, while Aircel has an 8.5 per cent share, according to GSMA Intelligence.

RCom is expected to spin off its wireless unit and then merge it with Aircel into a separate entity that will operate under a new brand name and not be listed for the first few years, the Times reported. RCom’s tower and overseas arms would remain part of the company.

According to the Times, RCom and Aircel will each transfer INR14 billion ($208 million) of their debt into the wireless entity.

Russia’s Sistema will hold 10 per cent in the listed RCom (RCom last year also struck a deal to acquire Sistema Shyam Teleservices, for about $690 million).

The Aircel merger will give RCom an additional 89 million customers and INR15 billion in annual revenue.

As part of a raft of cross-operator deals since the regulator eased spectrum trading and sharing rules last year, RCom and mobile newcomer Reliance Jio in January finalised a spectrum sharing and trading alliance that will see RCom sell 800MHz spectrum in nine regions to Jio and both share bandwidth in the same band in 17 service areas.

In April Aircel agreed to sell Airtel 4G spectrum in eight service regions for INR35 billion, which will give it a nationwide 4G footprint to match Jio’s pan-India coverage. The sale will enable Aircel to reduce its INR180 billion debt by about INR40 billion ahead of its planned merger with RCom.