Telenor India is interested in exploring a merger through a share swap with Aircel and Rcom, which are themselves trying to merge to create the country’s third largest operator.

According to The Economic Times (ET), Telenor wants to combine its business, customer base and spectrum with the Aircel-RCom entity, ending up with a 10 per cent share in the combined business. The remaining 90 per cent would be split evenly between Aircel’s owner Maxis Communications and RCom.

However, just two weeks ago, it was reported that market leader Bharti Airtel is edging towards an agreement to acquire Telenor’s India unit and is likely to finalise the deal by the end of February.

Sources cited in the ET report said these talks have not been abandoned, but explained Telenor “wants to leave as soon as it can,” and will “take the deal that will close faster.”

Vodafone India, Idea and Bharti Airtel have been hit hard by the entrance of newcomer Reliance Jio, with the operator causing a big splash by offering free voice and low cost data to the Indian market. Telenor is a small fish in this sea, with around 5 per cent market share, but it does own spectrum which can be used for 4G.

Telenor Group noted a number of positives in its Q3 2016 earnings statement – its most recent results announcement – including an “all-time high” EBITDA, but its bottom line was hit by an impairment charge for its India operation. The operator is due to announce its Q4 earnings on 2 February.

An unnamed executive told the ET discussions between Telenor, Aircel and RCom began in late December, but have been delayed by a Supreme Court case covering Aircel’s Indian operations. The executive said “there will be clarity” on the case by the end of this week, noting the court’s decision could ultimately lead to the collapse of a broader merger involving Aircel and RCom if it goes against Aircel.

Earlier this month, the Supreme Court said it would cancel Aircel’s 2G spectrum licence if the owner of parent Maxis Group, Ananda Krishnan, continued to evade appearing before Indian courts, giving him a 27 January deadline.

The case centres on how his company acquired a 74 per cent stake in Aircel.

Meanwhile, Vodafone Group confirmed it is in talks to merge its Indian business with rival Idea Cellular in a deal which could create a new market leader.