* Net profit 1.02 bln rupees vs 1.64 bln rupees forecast
* Revenue up 3 pct from year earlier
* Net debt $6.4 bln in June
(Adds details, company comment)
By Devidutta Tripathy
NEW DELHI, Nov 8 India's Reliance Communications
Ltd reported a larger-than-expected 60 percent drop in
quarterly profit, dragged down by the cost of its debt.
Consolidated net profit at the country's No.3 mobile phone
carrier by customers fell to 1.02 billion rupees ($19 million)
for its financial second quarter through September from 2.52
billion a year earlier.
A jump in finance charges including interest costs hurt the
company's net profit, Gurdeep Singh, chief executive of Reliance
Communications' wireless business, said in a phone interview.
He said the company, controlled by billionaire Anil Ambani,
saw key operating metrics such as average revenue per user
improving quarter on quarter.
Saddled with net debt of $6.4 billion as of June, more than
five times its annual operating profit, Reliance Communications
has so far failed to raise funds through selling stakes in its
A planned sale of its telecommunication tower unit that had
been expected to raise about $3 billion has dragged on for more
than two years. In July, Reliance Communications was forced to
shelve a Singapore public offering of its undersea cable unit
due to weak investor demand.
Reliance Communications and its main rivals Bharti Airtel
and V odafone's local unit are seen benefiting
from a court order to revoke the permits of several smaller
carriers which will shrink competition in a market that once
boasted more than a dozen players.
But the bigger carriers, including Reliance Communications,
face the risk of additional regulatory fee payouts as India's
cabinet earlier on Thursday approved a surcharge on airwaves
these companies already hold.
Reliance Communications, which had been the most aggressive
among its rivals to cut call prices, in September raised prices
by a quarter in a bold move as it saw competition tapering off.
Finance costs more than doubled to 5.93 billion rupees in
the September quarter from 2.59 billion rupees a year earlier,
Reliance Communications said in a filing to stock exchanges.
Revenue rose 3.2 percent from a year earlier to 52.02
billion rupees. Analysts had expected the company to report a
net profit of 1.64 billion rupees on revenue of 52.75 billion
rupees, according to Thomson Reuters I/B/E/S.
Monthly average revenue per user rose to 102 rupees for the
September quarter from 98 rupees in the previous three months,
Singh said. Average usage per user grew to 236 minutes from 228
minutes in the previous quarter, while average realisation per
minute was stable at 43 paisa, he said.
A paisa is 1/100th of a rupee.
Shares in Reliance Communications, valued at $2.2 billion,
closed 1.4 percent higher ahead of the earnings announcement.
The stock is down 16 percent this year, underperforming the
benchmark Mumbai index, which is up 22 percent.
($1 = 54.0650 Indian rupees)
(Editing by Erica Billingham)