On Saturday, Indian mobile phone network operator Reliance Communications got hit by the price war that has broken out in the world’s second-biggest mobile market.
Launch of Reliance Industries 4G broadband services with free voice and data services last year, has pushed other networks to draw on 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, headed by Anil Ambani, said that it made a consolidated net loss of 9.66 billion rupees (US$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.
The Company is in heavy debt load,428 billion rupees of net debt as on Dec. 31.
This has also weighed on the performance of Reliance Communications, which is the most leveraged among listed Indian telecommunication carriers.
Worries over its debt-servicing ability hit its shares and bonds this week. For the business survival and strength, Reliance Communications is merging its wireless business with rival company Aircel, and is also selling a 51 percent stake in its radio masts business to Canada’s Brookfield Infrastructure Group for 100 billion rupees.