MUMBAI Indian telecoms company Reliance Communications Ltd posted a 14.9 percent drop in quarterly profit on Friday, as cut-throat competition for customers in a crowded mobile phone market squeezed margins.
India is the world's second-biggest market for mobile phone users behind China, but tough competition has resulted in wafer-thin profit margins for carriers in a market that has one of the cheapest call rates in the world.
Debt-burdened Reliance Communications (RCom), controlled by billionaire CEO Anil Ambani, undertook a series of deals during the December quarter to raise money and expand coverage. These included a spectrum swap with elder brother Mukesh Ambani's Reliance Jio for high-speed 4G services.
RCom, India's fourth-biggest wireless telecommunications carrier, also signed a non-binding pact in December to sell its mobile phone masts business to a group of companies led by buyout firm TPG Capital Management LP.
For its fiscal third quarter ended Dec. 31, the company reported a net profit of 1.71 billion rupees ($25.29 million) against 2.01 billion rupees a year earlier. That beat analysts' average forecast of 1.65 billion rupees.
Third-quarter revenue fell 3.1 percent year-on-year to 52.98 billion rupees.
In November, RCom agreed to buy Sistema's Indian mobile phone business with a view to getting access to the Russian conglomerate's precious bandwidth that services the high-speed 4G network.
($1 = 67.6150 Indian rupees)
(Reporting by Himank Sharma; Editing by David Goodman and Mark Potter)
This story has not been edited by Firstpost staff and is generated by auto-feed.
Firstpost is now on WhatsApp. For the latest analysis, commentary and news updates, sign up for our WhatsApp services. Just go to Firstpost.com/Whatsapp and hit the Subscribe button.
Updated Date: Jan 22, 2016 21:40:17 IST