According to sources, this includes Karnataka and Delhi circles, besides Chennai, for which the bid has been put on hold for the time being. In order to acquire these circles, acquisitions may not be the only route but nevertheless it will remain one of the options, they said.

However, the possible routes to expand operations are yet to be evolved. It could be either fresh acquisition or as fourth operator licensee or cooperation across networks to service each other's customers or by sharing the marketing cost or through any other means.

As part of expanding existing operations, the company aims at increasing the subscriber base from 3 million at present to 15-25 million in five years from now.

In order to upgrade the quality of service for the existing customer base, the company plans to invest Rs 100 crore per circle per year. At present, the new company caters to cellular services in Maharashtra (excluding Mumbai), Goa, Gujarat, Andhra Pradesh, Madhya Pradesh and Chattisgarh, which together cover 30 per cent of the country's GDP.

Going by the estimate, the annual investments are at around Rs 500 crore-Rs 600 crore. Consequently, the company has already announced its plan to come out with an initial public offering (IPO) of around $125 million to $175 million, besides depending on internal accruals. The company is in the process of appointing the lead arranger to the issue. As part of its strategy to upgrade the existing levels of customer service, the company plans to come out with more value added services such as short messaging services, GPRS technology, better referred to as mobile Internet.

In order to facilitate the Internet through cell, the company in all possibility will tie-up with Ericsson, which is the ace provider in GPRS technology, said an analyst.

The combine is also in an advantageous position with the existing circles as it shares boundaries with many other states where the company can explore more business opportunities with the existing partners.

The merged entity is yet to start operations as various clearances are yet to be obtained. However, the shareholders of the individual companies that were merged to form Birla-Tata-AT&T have already given the green signal for the merger.

With the existing circles, the company needs to at least bid for six to seven licenses, each of which will cost around Rs 400 crore to the company.