Reliance Communications, India's second-biggest cellphone operator, reported an 85% decline in quarterly profit as sharply lower call charges after a vicious price war hit margins.
India is the world's fastest-growing mobile market, adding subscribers at a monthly average of 16 million, but stiff competition has led firms to slash call charges and give free minutes to attract subscribers.
Call prices in India have tumbled to as low as 0.4 US cents a minute and most of the declines took place in the second half of 2009.
There were no big price cuts in the April-June period, and some analysts are saying the worst could be over for the sector.
Reliance is gradually reducing free minutes from its network that would help it fight rivals "much better", Syed Safawi, the company's head of wireless business, said after the results.
Reliance was the most aggressive in cutting prices when the price war broke out in the sector last year.
Earlier this week Bharti Airtel, its bigger rival reported that quarterly profit fell by almost a third but signalled a bottom for the cellular market.
Just R20 for the first month. Support independent journalism by subscribing to our digital news package.