India’s Reliance Communications (RCOM) reported rising quarterly profit and revenue over the weekend, but results were weaker-than-expected as the firm felt the effects of heightened competition and rising financing costs.
Net income at India’s second-largest operator for the three months ended 30 June rose 3.2 percent to INR1.62 billion (US$39 million), while revenues were up 8.5 percent to INR52.6 billion. However, analysts in a Bloomberg poll had predicted a profit of INR1.84 billion on revenues of 53.7 billion on average.
The numbers closely reflect the trends seen at larger rival Bharti Airtel, which last week blamed “hyper competition” for a fall in profits. RCOM is also hamstrung by having to service huge debts. Its net debt stood at INR356 billion in Q2 and it noted that financing costs rose 35 percent to INR5.5 billion rupees during the period.
RCOM had 154.6 million subscribers at the end of the quarter. It reiterated an earlier assertion that it had 4 million ‘active’ 3G users, which it claimed was the highest in India. The operator says it has now rolled-out 3G services in all circles where it owns 3G spectrum, covering over 333 towns.