Indian telecoms carrier Reliance Communications (RCom) posted its third straight quarterly loss on Saturday as its heavy debt load and a price war triggered by an upstart rival continued to weigh on sales and profit.
The company's continued losses are, in part, a result of competition from free voice and cut-price data plans offered by Reliance Jio Infocomm, the telecom startup backed by Ambani's elder brother Mukesh.
"The telecom sector in India continues to be very adversely impacted during the financial year 2017-18 by competitive intensity on a scale never witnessed before in the country", RCom said in a statement.
The company's earnings before interest, tax, depreciation & amortisation (Ebitda) crashed over 65% on-year to Rs 543 crore from Rs 1,560 crore last year.
Separately, in a filing to BSE, RCom said its board had made a decision to seek shareholders' approval at the company upcoming AGM around late-September for doubling authorised share capital to Rs 5,000 crore, converting outstanding debt into equity shares if required and issuing privately-placed non-convertible debentures/other debt securities within the company's overall borrowing limits.
The share of the sector in NPAs has increased despite decline in actual value to Rs 2,335 crore in 2016-17 from Rs 3,465 crore in 2015-16.
The Economic Survey, tabled in Parliament on Friday, has raised red flag over the telecom sector's rising share in non-performing assets (NPAs).
The debt status of the company at the end of reported quarter could not be ascertained. It has been given time till December by the lenders to service dues. The validity of spectrum in these circles will remain till 2033.
RCom, whose mobile phone unit is India's seventh-ranked carrier with 82.3 million customers as of end-May, is awaiting regulatory approval for a merger of the unit with rival Aircel.
The company expects to further reduce debt of Rs 11,000 crore by sale of its tower business to Brookfield Asset Management, which it said is in final stage. In terms of percentage, the share increased to 8.7 per cent in 2016-17 from 5 per cent in the previous year.