Reliance Communications Quarterly Profit Halved

­India's Reliance Communications (Rcom) has reported a more than halving in its fiscal second quarter profits to Rs. 740 crore ($154 million), compared to Rs 1,531 crore a year ago. The company said the drop was largely due to the costs of deploying its GSM network along with stronger competition in the market.

The net profit was also impacted by foreign exchange and derivative losses of Rs. 283 crore (US$59 million).

Revenues rose to Rs. 5,703 crore (US$1.2 billion) compared to Rs 5,645 crore in the corresponding quarter last year. EBITDA at Rs. 2,020 crore (US$420 million) compared to Rs 2,302 crore a year ago.

Commenting on the results, Mr Anil Dhirubhai Ambani, Chairman, Reliance Communications Limited, said: "In the near term, the wireless sector in India is undergoing a challenging phase, with increased competitive intensity and continuing aggressive rebalancing of mobile tariffs by all leading players.

We believe a forward-looking and conducive regulatory framework by TRAI and DOT, which is already under consideration, to facilitate market driven industry consolidation will be a strong enabler to protect and create long term value for all stakeholders."

Posted to the site on 1st November 2009