India’s biggest mobile operator, Bharti Airtel has canceled its plan to purchase business and assets of Mumbai based small operator Loop Mobile for about Rs 700 crore. It has been reported that the merger deal between Airtel and Loop has been hampered by Department of Telecommunication (DoT).

The company owned by Dubai based IP Khaitan and family, which operates only in Mumbai has three million users and Airtel has around four million users in Mumbai alone. The merger could have made Airtel the largest operator in Mumbai in terms of subscriber base.

According the media report, Loop Mobile and Airtel had applied to DoT for approval of the business transfer in March 2014. The approval for the transaction is still awaited from the relevant authorities as a result of which Bharti Airtel has withdrawn from the proposed transaction causing huge loss to the company.

It is believed that DoT will soon start sending notices to Loop subscribers to switch to another operator before the company’s permit expires in November.

Airtel and Loop Mobile had signed a definitive agreement in June 2014.

On February 18, Airtel and Loop Mobile had announced a strategic agreement for their operations in Mumbai (India) service area. Under the agreement, Loop Mobile’s 3 million subscribers in Mumbai were suppose to join Airtel’s over 4 million subscribers.