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RCom Q2 net drops by 37% to R102 crore

Billionaire Anil Ambani-controlled company Reliance Communications posted a 37% drop in net profit for the September quarter to R102 crore compared with R162 crore in the preceding quarter, hurt by a dip in profit at its global enterprise business and seasonal weakness.

Billionaire Anil Ambani-controlled company Reliance Communications (RCom) posted a 37% drop in net profit for the September quarter to R102 crore compared with R162 crore in the preceding quarter, hurt by a dip in profit at its global enterprise business and seasonal weakness.

The company, which is the third-largest phone carrier by subscribers, saw its profit fall 59% on a year-on-year basis. Total income fell 4% to R5,031 crore for the quarter, from R5,264 crore in the quarter ended June 30.

Profit at the company?s global enterprise business fell 28% to R259 crore from R340 crore in the preceding quarter.

?This quarter is seasonally weak for the entire industry,? said chief executive officer Gurdeep Singh, adding that average revenue per user (ARPU) rose to R103 compared with R98 last quarter.

This quarter is generally weak for telecom companies as usage in rural areas tends to fall because farmers are left with less cash before the harvesting season in October. On Wednesday, bigger peer Bharti Airtel posted its eleventh successive quarter of falling profits.

During the quarter, RCom raised pre-paid tariffs by 25% across its GSM and CDMA platforms. ?We expect the full revenue impact of the tariff hike to reflect by next fiscal,? the company said.

The company, which is saddled with a debt of about R35,000 crore, accounts for 10% of the cumulative debt of the telecom sector. Being the most leveraged company in the Indian telecom sector, RCom has been trying to reduce its debt load. In September, the company again tried to reassure investors and said it will look at selling some stake in its telecom tower business next year to pare some of its mounting debt.

RCom share closed up 1.3% at R58.55 on Thursday on the Bombay Stock Exchange.

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First published on: 09-11-2012 at 01:18 IST
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