Reliance Communications expects the "hyper competition" phase in the sector to continue for now, after hefty fall in call charges led to the third-straight quarterly profit decline at India's No. 2 mobile phone carrier.India, the world's fastest-growing mobile market, is signing up new mobile subscribers at a monthly average of 16 million, but call prices have fallen to as low as 0.4 U.S. cents a minute amid stiff competition in the crowded 15-operator market."The industry continues to remain challenging with hyper competition," Satish Seth, group managing director at the mobile operator's parent Anil Dhirubhai Ambani Group, said in an analyst call on Monday."As we move into the next fiscal year, we continue to see some select tariff changes from the competition in the industry," he said of the year that began in April.Reliance Communications reported on Saturday March quarter profit fell an annual 16 percent to 12.20 billion rupees ($267 million). The earnings exceeded a Reuters poll forecast of 8.52 billion, helped by a rise in interest income.The company has been more aggressive in cutting call charges than larger rival Bharti Airtel, and earlier this month said it would offer unlimited call time to its CDMA users at a monthly price of just $13.CAPITAL EXPENDITURESeth said Reliance Communications was well positioned to cash in on its falling capital expenditure and two separate nationwide networks on both GSM and CDMA mobile platforms.The company reiterated its capital expenditure guidance of 30 billion rupees for the year to March 2011, which should be a third lower than what it spent in the previous fiscal.The guidance does not include expenditure on 3G spectrum licences. Reliance is participating in the ongoing auction, in which bids for one set of nationwide licences have hit $3.5 billion.Reliance Communications is yet to set a date for a planned IPO of its tower unit, which banking sources have said could raise as much as $1 billion. The company received the capital market regulator's nod for the IPO in January.Reliance Communications shares ended 2 percent down at 141.60 rupees in the main market that fell 0.9 percent.The stock was the worst performer among the components of the main index in 2009 and has fallen 18 percent this year, underperforming the main market, as falling call charges and heavy expenditure on 3G cloud the sector's growth potential.($1=45.7 rupees)(Reporting by Devidutta Tripathy; Editing by Surojit Gupta)(For more business news on Reuters Money visit http://www.reutersmoney.in)News posted by www.newsinfoline.com
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