Tata Communications, which has a market value of about $1.3 billion and is part of the salt-to-software Tata Group conglomerate, is vying with British telephone giant Vodafone plc to buy Cable & Wireless.

Securing bank funding is crucial for Tata Comm's ambitious bid as its market value is smaller than its target. It also has a poor financial record, having posted losses in the past two fiscal years to March 2011.

The size of the loan has changed from the originally intended $2 billion, but it is not clear if it has increased or decreased, the report said, citing sources familiar with the situation.

Both Tata Communications and Vodafone have until to Thursday to decide whether to seek an extension for their bids, although analysts do not expect C&W shareholders will allow the process to drag out.

A successful bid will give Tata Communications access to C&W's global network of fixed telephone lines that can be used to relieve pressure on mobile networks, and provide voice, data and other services. C&W Worldwide has a cable network linking more than 150 countries.

Shares in Tata Communications, which is 26% owned by the Indian government, were up 2.3%, outpacing a 0.6% gain in the BSE Sensex.

Tata Communications has received underwritten commitments from five banks: Standard Chartered Bank, ANZ, DBS Bank, ING Bank and State Bank of India, the report added.

StanChart and Morgan Stanley are M&A advisers to Tata Communications, but Morgan Stanley is not providing funding, the report added.

Basis Point previously reported the loan at $2 billion with a life of 30-36 months. Pricing on the loan is expected to be more than 375 basis points.