New Delhi: India's largest telecom operator Bharti Airtel on Thursday announced acquisition of Norwegian Telenor's India unit in the latest consolidation move in an industry where incumbents are joining forces against the disruptive pricing by newcomer Reliance Jio.

Telenor has a customer base of 44 million in seven circles of Andhra Pradesh, Bihar, Maharashtra, Gujarat, Uttar Pradesh (East), Uttar Pradesh (West) and Assam. India business was a loss making proposition for the Norwegian firm. Airtel will not make any cash payment for Telenor's India unit but will take on Rs 1,600 crore future liability towards spectrum licence fee and mobile tower rentals.

The consolidation in the otherwise crowded Indian telecom industry has been hastened by Jio’s free voice call and data plans, forcing incumbents to slash tariff at the cost of profits.

Its market share will rise to 35.6 per cent following the acquisition of Telenor, which currently has 2.6 per cent share in Indian market. The announcement came days after No.2 player Vodafone and Idea said they are considering merging their businesses to create the biggest telecom operator in the country with about USD 12 billion in sales. Anil Ambani-led Reliance Communications has already signed a pact to merge its wireless business with smaller rival Aircel. "The proposed acquisition will include transfer of all of Telenor India's assets and customers, further augmenting Airtel's overall customer base and network," Airtel said in a statement.

Telenor India has 700-800 employees. The acquisition, which is subject to regulatory approvals, will also enable Airtel to further bolster its strong spectrum foot-print in the seven circles, with the addition of 43.4 MHz spectrum in the 1800 MHz band. Airtel is India's largest wireless operator with over 269 million subscribers and a revenue market share of over 33 per cent.

"As the new owner, Airtel will take over Telenor India's spectrum, licences and operations, including its employees and customer base of 44 million," the Norwegian firm said in a statement. "Telenor's operations and services will continue as normal until the completion of the transaction." According to the agreement signed between the two firms, Airtel will take over outstanding spectrum payments and other operational contracts, including tower lease.

The transaction is expected to close within 12 months.