SingTel and Bharti Airtel plan to set up a separate company for the acquisition of South Africa's MTN Group, a Reuters report said.
The Reuters report, quoting the Business Standard paper, also said the special purpose vehicle (SPV) will raise funds, including bridge loans, and may later sell American Depositary Receipts or Global Depositary Receipts to repay the debt.
Citing sources, the paper also said the SPV would be a subsidiary of unlisted Bharti Telecom, it said, which owns about 45% in Bharti Airtel.
MTN would not be offered a stake directly in Bharti Airtel, the paper said, as that may push foreign ownership in the Indian firm beyond the limit of 74% permitted by Indian law.
Bharti, India's top mobile telecoms operator, could raise funds by diluting the equity of the SPV, or the stakes of Bharti founders or SingTel, which has more than 30%, it said.
Merging the two firms would create the world's sixth-largest mobile operator, with more than 130 million subscribers in around two dozen countries.
A spokesman for Bharti declined comment.