The company did not disclose the size of deal but sources close to the agreement said it is for about Rs 700 crore.
Under the agreement, Loop Mobile's 3 million subscribers in Mumbai will join Airtel's over 4 million subscribers, making it a largest network in the metropolitan city, according to a statement by Bharti Airtel.
Under the proposed transaction, Loop Mobile's 2G-enabled network supported by 2,500 plus cell sites will also become part of Airtel's network which has over 4,000 cell sites at present.
The agreement will ensure continuity of services to Loop Mobile's subscribers, whose licence is expiring in November, with option to access Airtel's services.
Sources added that under the agreement, Airtel will not acquire employees of Loop Mobile. Status of Loop's employees could not be immediately ascertained.