Two Indian cellphone retailers are forming an alliance to unify their backend technology.

For Spice Mobility‘s Spice Hotspot and Optiemus Group‘s Mobiliti World and Univercell, the move is a precursor to a merger and the eventual sale of a sizeable stake in the combined entity. Experts say the companies are joining hands to gain economies of scale and create a pan-­India presence next to the largest player, Reliance Retail, reports the Economic Times.

Spice Mobility chairman Dilip Kumar Modi says his company will have day-­to-day control of Mobiliti World and UniverCell along with Spice Hotspot as part of the deal.

“This is for adopting the best practices in back­end and also expand the front­end together.

“Spice will get some equity in Mobiliti World and UniverCell as management incentive, but eventually there will be a merger,” says Modie. “After that, we will explore options to unlock
value either through an IPO or sale to a strategic investor.”