India's telecom service provider, Reliance Communications (RCom) has recorded a lower than expected 3.2 per cent rise in profits during the first quarter of the financial year till June 2012.

The company's consolidated net profit rose 3.2 per cent to Rs 162 crore during the quarter then its revenues rose 8 percent to Rs 5319 crore compared to the same quarter of 2011. . The operating (EBITDA) margin for the quarter was at 31 percent, compared to 32.4 percent in first quarter of the previous financial year.

Even as the company recorded a second consecutive quarter of rising profits, the growth was pulled down by higher finance costs. The company is competing in a highly competitive Indian telecom market that more than a dozen service providers. The earnings in the sector have been under pressure due to fall in voice call prices and high payouts for 3G airwaves.

The Anil Ambani led company also had a net debt of about $7 billion as of March 2012. The company had appointed Gurdeep Singh as chief executive officer of Reliance Communications' mobile business in May this year. He says that the market is a highly competitive market but there are some growth prospects in the data segment that offers higher revenues than voice segment.