State-owned telecom operator Bharat Sanchar Nigam Ltd (BSNL) is reportedly in talks with Mobile TeleSystems (MTS) to provide fourth generation, or 4G, telecom services jointly across the nation.

"We are in the final stages of discussions with MTS and are awaiting the government's policy on spectrum sharing and trading, expected to be announced soon," a senior BSNL official told Business Standard.

MTS, the Indian arm of Russian conglomerate Sistema, currently has a subscriber base of nearly 10 million spread across nine telecom circles. BSNL offers services in all circles except Delhi and Mumbai.

The two telecom operators are looking to combine their spectrum across circles and provide 'co-branded' services after the government announces its policy on spectrum sharing, the official said.

A spokesperson for MTS it is too early to say anything on the development.

"All telecom players talk to others. But in the absence of a regulatory framework, it would be premature to comment on this," said the spokesperson.

BSNL, which has limited spectrum, would require at least five MHz to rollout full-fledged 4G services, said a company official. 

The rollout of 4G services jointly by BSNL and MTS will need the consent of the Department of Telecommunications and will be introduced only in select circles, the official added.

The government is expected to announce guidelines pertaining to spectrum sharing and trading shortly. The Telecom Regulatory Authority of India (TRAI) had made a recommendation on permitting the sharing and trading of spectrum among telecom operators.

BSNL plans to offer 4G services by next year through two channels. The first channel will through Wi-Fi and the second by partnering with other telecom operators, said the official.

Bharti Airtel, India's largest telecom operator, has already introduced 4G services in 23 cities. Mukesh Ambani's Reliance Jio is likely to rollout 4G services by next month.

"BSNL will invest Rs 39,000 crore in the next five years, a major chunk of it on data. The focus is on improving core network capabilities, as we intend to exploit data," said Chairman and Managing Director Anupam Shrivastava in a recent interview.