India’s Bharti Airtel and Malaysia’s Axiata are discussing merging their operations in Bangladesh to create the country’s second largest player behind market leader Grameenphone.

The merger of Airtel and Axiata’s Robi would give the combined firm a 28 per cent market share by subscribers, pushing it past current number two Banglalink with a 25 per cent share.

While the companies confirmed they are holding talks, a deal has not been confirmed, Axiata said in a stock market filing.

Airtel has less than a 7 per cent market share in Bangladesh and is the fourth largest among eight operators – the four smallest have a combined share of less than 5 per cent. Grameenphone has almost a 42 per cent share.

Last month Bharti reportedly was considering selling its Bangladesh operations.

Airtel would be a minority shareholder in the new company, while Axiata would maintain a majority interest and management control, a Bharti representative said.

Airtel’s revenue from operations in South Asia, which includes Sri Lanka and Bangladesh, fell 11 per cent in Q2 to INR3.8 billion ($57.3 million).

Robi posted solid revenue growth in H1, with sales up almost 17 per cent year-on-year.