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Sales rise, but RCom profit growth slows

Sales rise, but RCom profit growth slows
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First Published: Thu, Jan 31 2008. 11 46 PM IST
Updated: Thu, Jan 31 2008. 11 46 PM IST
Bangalore/ New Delhi: Reliance Communications Ltd (RCom), India’s second largest wireless telco, reported profit growth that slowed as phones offered for as little as Rs800 failed to help it win as many customers as its larger rival, Bharti Airtel Ltd.
Net income increased 49% to Rs1,370 crore in the three months ended 31 December, from Rs921 crore a year earlier, Reliance said. Sales rose 27% to Rs4,780 crore. Chairperson Anil Ambani said he will increase spending by a fifth to $6 billion (Rs23,640 crore) next fiscal year on transmission towers, switches and dishes.
Of the proposed spending, Reliance will invest about $1.3 billion on equipment for its global system for mobile communications (GSM) networks, Ambani said. The carrier, which operates a nationwide network based on the competing code division multiple access, or CDMA, technology, has been allotted airwaves, or radio frequencies, to start services based on the competing technology in 14 telecom zones, he said.
“Profit comes from two factors: one is volume, and second is price, and we see clear pressure on both accounts,” said Vijai Mantri, who helps manage $711 million in equities at Deutsche Asset Management Co.
Reliance Communications added 4.64 million customers in the three months ended 31 December to end with 41 million, according to data from the Telecom Regulatory authority of India. That compared with Bharti Airtel’s 6.28 million additions. Bloomberg
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First Published: Thu, Jan 31 2008. 11 46 PM IST