India's RCom reports 37% dive in quarterly profit

India's second-biggest mobile firm, Reliance Communications, has reported a worse-than-expected 37 percent dive in quarterly net profit as revenues remained under pressure in the competitive sector. The announcement on its website Sunday marked the eighth straight quarterly fall in profit of the flagship Mumbai-based company led by billionaire Anil Ambani. Net profit fell to 1.57 billion rupees ($35 million) for the fiscal first quarter ended June 30 from 2.50 billion rupees for the same period last year, the company said in a statement. Revenues slipped 3.3 percent to 49.4 billion rupees. In contrast, rival Bharti Airtel, the country's largest mobile services company by users, has reported strong revenue growth. The revenue decline came amid higher interest costs after RCom borrowed to spend 86 billion rupees on spectrum to start extra-fast third-generation (3G) mobile services. The quarterly performance undershot analysts' expectations that the company would post a profit of around 200 billion rupees.RCom is burdened with over $7 billion in debt. It has been struggling to raise cash and announced earlier in the year that it had received offers to buy its tower infrastructure arm, but no agreement has yet been clinched. RCom said it had increased call charges by some 20 percent due to nearly double-digit inflation, according to the Press Trust of India news agency, as rivals also have increased calling rates."We are looking for quality customers who give us revenue," Syed Safawi, head of RCom's wireless business, told the news agency. Indian mobile customers have enjoyed some of the world's lowest calling rates due to fierce competition among the more than dozen players in the congested telecom market, which is the world's fastest-growing.RCom shares have lost more than 40 percent of their value this year, while market leader Bharti Airtel's shares have gained close to 10 percent. The company has also been battling accusations from police that it may have gained unfairly from the government's sale of second-generation spectrum in 2008. Three Reliance executives -- along with government bureaucrats, a former telecom minister and others -- have been arrested in the case, alleged to have cost India's exchequer up to $40 billion.All those accused have denied any wrongdoing.