RCom's Q1 profit slumps 37%

Dylan Bushell-Embling
15 Aug 2011
00:00

India's Reliance Communications has reported a 37% slump in June-quarter net profit to 1.57 billion rupees ($34.59 billion), due to high debt costs and forex losses.

The company, India's second largest mobile operator by subscribers, also reported a 3.3% decline in revenue to 49.40 billion rupees.

It was RCom's eighth straight quarter of declining profit, according to Reuters, and the scale of the slump was significantly worse than the analysts polled by both Reuters and Bloomberg had been expecting.

The company ended the quarter with over 143 million mobile customers, but was saddled with a debt burden of more than $7 billion.

But RCom hopes that a planned sale of its tower infrastructure business will reduce its debt by nearly half.

Earnings for the quarter were also impacted by the aggressive price competition in India's cutthroat mobile market.

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