The deal is likely to be speeded up by the truce that was announced on Tuesday between Tata Sons and Japanese telecom giant NTT Docomo in the long-standing USD 1.17-billion dispute over their failed joint venture.
Due diligence typically takes a minimum of two to three months, while the contours of the deal may become clearer in the next few days.
The deal may take place through a share swap, in which TTSL will be absorbed into the company. RCom's merger with Aircel and MTS is likely to be finalised by the end of March.
Tata Teleservices had reportedly been in talks with Airtel and Vodafone previously.
Tata Teleservices' debt currently stands at Rs 30,000 crore and is likely to be a sticking point. It is understood that RCom is unwilling to shoulder the burden of the entire debt and so the Tatas will have to take a significant write-down on its investment.
All the concerned parties refused to comment. TTSL's stock rose 20 percent in intra-day trading on Tuesday, while RCom rose 7 percent.
The development comes as consolidation in the telecom sector has gathered steam after the entry of Reliance Jio, which has clocked 100 million subscribers in less than six months. While Vodafone India and Idea Cellular are in talks for a merger, Bharti Airtel announced last week that it would acquire Telenor.
There were reports last week that RCom Chairman Anil Ambani had initiated talks with newly-appointed Tata Sons Chairman N Chandrasekaran.
The combined entity would become the third largest telecom player in the country after the proposed Vodafone-Idea combine and Bharti Airtel.Tata Teleservices currently has a subscriber base of roughly 53 million. If the merger with RCom-Aircel goes through, then the combined entity will have around 260 million subscribers and a revenue market share of over 18 percent.