Mobile sales have grown fast in both India and South Africa
Indian mobile firm Bharti Airtel and South African phone business MTN are continuing exploratory talks about a tie-up, according to media reports.
Experts estimate a deal could be worth $20bn (£10.2bn), making it India's largest takeover of a foreign firm.
Earlier this week Bharti said talks were aimed at combining the strengths of the two "leading emerging markets" firms but that it had not made a bid.
Any tie-up would create the world's sixth-largest mobile operator.
Combined together, the firms would have more than 130 million subscribers across more than 20 nations.
After China, India is the second-largest market for wireless services.
Jan Meintjes, a fund manager at South Africa's Gryphon Asset Management, said there were other options beyond a merger.
"It can be joint venture or it can be one of a number of other structures ... Both sides will want something that will bring the best value to shareholders," he said..