MUMBAI: India’s largest cellular carrier, Bharti Airtel, is set to acquire small mobile operator Loop Mobile for about Rs 300 crore, according to reports. This would be the first merger in six years in an industry long seen as ripe for consolidation.

Loop, which operates only in Mumbai with about three million subscribers, was up for grabs as a potential acquisition as its spectrum licence lapses on 28 November.

If Bharti completes the acquisition it will overtake Vodafone India and become the market leader in terms of customer numbers, although not by revenue in Mumbai - which is one of the biggest cellphone markets in India.

The deal - if it happens - would also see Bharti take on Loop’s debt of nearly Rs 400 crore.

Industry consolidation has been slow to take place in the world’s second-largest cellular market due to challenging merger rules, including a new requirement that the buyer pay separately for the target company’s airwaves based on prices determined at an auction.

Loop Telecom, an associate company of Loop Mobile, lost its permits in 21 of India’s 22 teleco service areas after the Supreme Court order on the 2008 wireless permits. Loop has denied any wrongdoing.

Loop’s main investor is Dubai-based Khaitan Holdings, whose founders are related to the founding family of Indian conglomerate Essar Group. Essar owns over a per cent in Loop.