Indian conglomerate Reliance Industries reported a 23 percent fall in quarterly net profits on Thursday in its first earnings report since launching 4G mobile services with great fanfare last month.
The Mumbai-based firm said consolidated net profit for the three months through September fell to 72.06 billion rupees ($1.08 billion) from 93.45 billion rupees a year earlier, a decline of 22.9 percent.
The company, owned by India's richest man Mukesh Ambani, said the fall was led by lower refining margins in its key oil business but comes after it launched its long-awaited Reliance Jio 4G network in September. The oil-to-telecommunications company announced the start of the service, which had been delayed for almost two years, by offering a free service for the rest of 2016 and free voice calls for life.
It has poured more than $15 billion into the telecom venture on wireless spectrum and infrastructure with experts believing it will be a game changer for the group as it tries to diversify its business.
Reliance derives most of its earnings from its massive energy operations but is trying to rely less on oil refining margins for its profits. As well as its telecoms business it now also owns a supermarket chain. Reliance said it had picked up a "world record" 16 million Jio subscribers in its first month of operations.
"We are delighted and humbled by the enthusiastic adoption of Jio by India. Jio is built to empower every Indian with the power of data," the company said in its statement. Reliance wants the Jio network to cover 90 percent of India's 1.25 billion population by March 2017 but faces stiff competition from rivals, including Bharti Airtel, in a highly competitive telecommunications sector. The company said the profit earned from each barrel of crude, or gross refining margin, was $10.1 in the just concluded quarter, down from $10.60 a year earlier. Refining margins are a key profitability gauge for Reliance, one of the world's largest refiner.