Industry sources said that preliminary negotiations between the two sides have been already held. The talks will take a final form only after the contours of the new telecom licensing policy--revenue sharing, et al--are crystal clear.

"The issue is on the table," said BPL Telecom Business group's chief business development officer AP Parigi. "We are here for the long term and are one of the few players who are expected to survive in this industry. We will take decisions whenever required to propel our growth in the industry," said Parigi. The Ruias were not available for comment.

BPL group vice-chairman Rajeev Chandrashekhar has, in the past, publicly said that the group would look at acquisitions as a means to expand the business.

"The BPL groupis, in wake of the new telecom policy, looking at growth in the business. The group has only got a presence in the southern states of Tamil Nadu and Kerala, and in Maharashtra in the west. Therefore, picking up some northern circles will give it a more national presence. They are a group which is focussed on the telecom business and would not hesitate to pick up attractive circles," said a source close to BPL.

"The first round of talks, very preliminary in nature, have been held a couple of weeks back. The final position would only be clear once the Government outlines the terms for existing telecom-service providers to switch to the revenue-sharing regime. Valuations would only be possible at that point of time," the source said.

Several telecom players have not been able to cope with the high bids that they had put in for licenses. Most players are finding the going tough in meeting finances.

The industry was in the throes of a crisis recently with several operators defaulting on their licence-feecommitments and the issue was resorted after the Department of Telecommunications (DoT) made it clear that it would settle for nothing but payment of 20 per cent of the licence fee dues and securitisation of the remaining 80 per cent through bank guarantees.

The Ruias' plan to offer a 50.04 per cent stake in Sterling Cellular, the operating company for the Delhi cellular circle, to SwissCom did not go through with the latter pulling out of India altogether. The promoters later opened talks with WorldTel and American International Group to offer a 49 per cent stake in Essar Telecom, the holding company for the Essar's telecom ventures.

"Consolidation will take place both in the metro and circle-based cellular business," industry watchers said.