Indian operator group Bharti Airtel has announced plans to acquire regional player Loop Mobile. The group said that Loop Mobile’s three million subscribers and 2,500 cell sites in Mumbai will add to its own four million subscriber base and its 2G and 3G network with 4,000 cell sites in the city.

The group did not disclose the amount it will pay for Loop, but reports in India suggest it could be in the region of INR7bn ($1.12bn).

Bharti Airtel is India’s market leading operator with 192.1 million subscribers nationwide as of September 2013, according to Informa’s WCIS. Its nearest rival in the country is Vodafone with 155.2 million subscribers. While Airtel has a total of 289 million customers in 20 countries, Loop Mobile, a subsidiary of Loop Telecom, is limited to Mumbai since its parent was revoked of all of its mobile licences in India bar Mumbai in 2012, as part of the fallout of India’s compromised 2G spectrum auction in 2008.

Bharti added that the subscribers it acquires from Loop Mobile will benefit from a wider portfolio of products and services such as 3G, 4G, Airtel Money and domestic and international roaming capabilities.

While the acquisition of Loop is subject to regulatory approval, Anubhuti Belgaonkar, senior analyst at Informa Telecoms and Media, believes that the acquisition will be given the green light by the authorities, who have recently eased the rules surrounding M&A activity in the country’s telecoms sector.

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“According to the new M&A rules, an operator’s market share is decided based only on the service area in which it is looking to acquire,” she said. “The government also recently increased the limit of market share an operator can have after acquiring another, so Airtel and Loop should be okay.”

She added that the last acquisition that India’s telecoms market had seen was Idea Cellular’s acquisition of Spice Mobile, which was finalised in 2010. However it was only this year that Idea was granted access to Spice’s spectrum licences and Belgaonkar believes we can expect to see more M&A in India in the near future.

“There have been new declarations from the government and the regulation is now a little more structured,” she said. “I think there will be more in-market consolidation, particularly for smaller players, like Loop Mobile, that do not have nationwide presence. There are rumours cuirculating in India that Vodafone is looking to acquire [Indian conglomerate] Tata’s mobile operator business, so I think we will see more M&A activity in the market.”