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RCom net falls 43.5% to Rs 252 crore in Q2

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BS Reporter Mumbai

Debt-laden mobile operator Reliance Communications posted its ninth straight drop in quarterly profit, with investors awaiting a deal to sell its tower unit and bring in much needed funds.

India's second-biggest mobile operator by subscribers said consolidated net profit fell to Rs 252 crore in the second quarter, from Rs 446 crore in the year-ago period.

Total income for the quarter decreased 1.53 per cent to Rs 5,040 crore from Rs 5,118 crore in the corresponding quarter of the previous financial year.

The firm, controlled by billionaire Anil Ambani said its customer base rose 2.7 per cent to 147 million in the quarter.

 

The outlook for mobile operators in India, the world's second-biggest wireless market after China, has improved since firms, including Reliance Communications, raised voice call prices earlier this year, the first such increase in two years.

The change is yet to be fully reflected in companies' profits but was a welcome move after a vicious price war in the crowded 15-player market kept profits under pressure for about two years.

The company had aggressively cut prices and gave away free voice minutes to lure customers during the price war and a senior executive had said in August he expected to see the full benefit of the recent call price increase in about two quarters.

Under a new telecom policy, the government is working to relax rules to help consolidation in the crowded market that is seen as a positive for bigger firms who were hit by stiff competition from new entrants after the government issued more telecoms licences in 2008.

Also, companies including Reliance Comm this year rolled out high-speed third-generation (3G) networks and are betting on take-up of the premium services to boost margins.

Saddled with more than $7 billion of debt as of end-June, the company is looking to sell its telecom tower unit and expects a deal to help reduce its debt by almost half. Reliance Comm said in late May it had received several buyout offers for the unit but was yet to seal a deal. Its latest debt level was not immediately available.

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First Published: Nov 13 2011 | 12:00 AM IST

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