Monday , 17 June 2019
Breaking News
Reliance Communications hit by Indian mobile price war – Business Insider

Reliance Communications hit by Indian mobile price war – Business Insider

worker cleans a mobile store of Reliance Communications Lts,
controlled by billionaire Anil Ambani, in

By Sankalp Phartiyal

MUMBAI (Reuters) – Indian mobile phone network operator Reliance
Communications Ltd posted its second straight quarterly loss on
Saturday, hit by the price war which has broken out in the
world’s second-biggest mobile market by number of users.

The launch last year of rival Reliance Industries’ new Jio 4G
broadband service with free voice and data services has forced
other networks to come up with cheaper plans of their own,
squeezing margins and in some cases dragging down sales, with
bigger rivals Bharti Airtel, Idea Cellular and Vodafone India
also suffering from the cut-price competition.

Reliance Communications, controlled by billionaire Anil Ambani,
said on Saturday it made a consolidated net loss of 9.66 billion
rupees ($149.8 million) for its fiscal fourth quarter to March
31, compared with a 900 million rupees net profit in the same
period a year earlier.

Four analysts had, on average, expected Reliance Communications
to report a loss of 7.48 billion rupees, according to data
compiled by Thomson Reuters.

Revenue from operations fell about 24 percent from a year earlier
to 43.12 billion rupees.

Its heavy debt load – 428 billion rupees of net debt as on Dec.
31 – has also weighed on the performance of Reliance
Communications, which is the most leveraged among listed Indian
telecommunication carriers.

The latest debt figure as of end-March was not immediately
available. But finance costs rose 24.3 percent from a year
earlier to 9.83 billion rupees, the company said.

Worries over its debt-servicing ability hit its shares and bonds
this week.

To strengthen the business Reliance Communications is merging its
wireless business with rival Aircel, and is also selling a 51
percent stake in its radio masts business to Canada’s Brookfield
Infrastructure Group for 100 billion rupees ($1.54 billion).

The company expects its debt to fall by about 250 billion rupees
this financial year after the completion of the deals, it said in
Saturday’s statement.

($1 = 64.5050 Indian rupees)

(Reporting by Sankalp Phartiyal; Editing by Devidutta Tripathy,
Greg Mahlich)

Read the original article on Reuters. Copyright 2017. Follow Reuters on Twitter.

Let’s block ads! (Why?)

Source link

Share and Enjoy

Leave a Reply

Your email address will not be published. Required fields are marked *