New Delhi, Feb. 18: Telecom major Bharti Airtel today announced it would buy the business and assets of Loop Mobile in Mumbai under a strategic agreement.

The company did not disclose the size of the deal, but sources close to the agreement said it was for about Rs 700 crore.

Under the agreement, Loop Mobile’s three million subscribers in Mumbai will join Airtel’s over four million subscribers, making it the largest network in the metropolitan city, according to a statement by Bharti Airtel.

Under the proposed transaction, Loop Mobile’s 2G-enabled network, which is supported by 2,500-plus cell sites, will become part of Airtel’s network of over 4,000 cell sites.

The agreement will ensure the continuity of services to the subscriber of Loop Mobile, whose licence is expiring in November, with an option to access Airtel’s services.

Sources added that under the agreement, Airtel would not acquire the employees of Loop Mobile. The status of Loop’s employees could not be immediately ascertained.

The announcement of the deal with Loop sent the Bharti Airtel scrip plummeting on the bourses today, eroding its market capitalisation by Rs 994 crore.

Airtel’s shares slumped as much as 1.86 per cent to touch an intra-day low of Rs 299.40 on the BSE. It gained some ground later and closed at Rs 302.20, down 0.95 per cent.

Accordingly, the market capitalisation of the company declined Rs 994 crore to Rs 1,20,801 crore.

Fitch forecast

The recent spectrum auction will help in consolidation in the telecom industry and the number of players in the country could come down to six to seven with smaller operators likely to be acquired by the larger ones, Fitch Ratings said today.