MUMBAI (AFP) – Indian telecoms firm Reliance Communications on Monday showed a worse-than-expected drop in quarterly net profit -- its seventh straight quarterly fall -- as costs outpaced revenues.
Net profits at RCom, controlled by billionaire Anil Ambani, slid nearly 87 percent to 1.69 billion rupees ($37 million) for the three months ended March from 12.2 billion rupees last year, a statement showed.
Revenues for the fiscal final quarter fell 65 percent to 78.76 billion rupees.
Analysts had expected RCom to show a profit of three billion rupees.
RCom shares rose 2.94 percent or 2.5 rupees to 87.5 rupees on the benchmark Sensex index at the Bombay Stock Exchange before its earnings on bargain hunting, after being battered in recent months.
Investors have been offloading shares in the group since news emerged that Ambani met federal police in April, who were investigating alleged irregularities in the awarding of second-generation (2G) mobile phone licences.
Three senior officials from group subsidiary Reliance Telecom face charges of cheating, forgery and criminal conspiracy in the 2G fraud case, which the national auditor estimates cost the country nearly $40 billion.
The 2008 sale has also led to the arrest of former telecoms minister A. Raja, a number of his close aides and a property tycoon.
Both Ambani, India's eighth-richest man with an estimated $8.8 billion fortune, according to Forbes, and the group have denied any wrongdoing.
RCom is one of several Indian cellular firms that compete intensely in a fast-growing sector.
India is the world's fastest-growing cellular market and has more than a dozen operators, compared with just two state-owned telecom firms a decade ago.
The flood of new players has unleashed a cut-throat price war, affecting the profits of most local telecom firms, with calls now costing less than a cent a minute in India.
For the full year, RCom's net profit fell 71 percent to 13.46 billion rupees, from 46.55 billion rupees, the company said.