Last checked at 
* Reliance Comm Q2 net more than doubles before one-off gain
* Vodafone India reports 13 pct revenue growth
* India telecoms market in recovery mode
By Devidutta Tripathy
NEW DELHI, Nov 12 (Reuters) - Higher call tariffs andreduced competition helped two of India's biggest telecom firmsto boost quarterly results, underscoring the recovery in theworld's second-biggest mobile phone market by subscribers.
Reliance Communications Ltd, the market'sfourth-largest carrier and controlled by billionaire AnilAmbani, smashed estimates with quarterly net profit more thandoubling before a one-time gain.
Vodafone's unlisted Indian unit, the country's No.2 cellularoperator, said it would increase investment in its mobile datanetworks, after reporting quarterly revenue rose 13.3 percent.Vodafone India also said the country's regulatory environment,which has been a major drag, was gradually improving.
"This time I can say that I am more positive about theenvironment than before," Marten Pieters, chief executiveofficer of Vodafone India, told a news conference on Tuesday. Hesaid customers continued spending on telecoms services despiteslower economic growth and high inflation.
India is home to the world's largest number of mobile phonesubscribers after China, but the sector's profitability had beenhammered by a price war, before starting to improve in the pasttwo quarters.
Carriers such as Bharti Airtel Ltd, VodafoneIndia, Idea Cellular and Reliance Communications wereearlier this year able to raise tariffs for voice calls after agap of two years, after a court revoked the permits of smallerrivals, forcing them to scale back or shutdown.
In a market where voice calls account for close 85 percentof revenue, the next battleground between carriers is likely tobe in the high-margin mobile data services.
Reliance Communications recently started distributing AppleInc's latest iPhones on a two-year contract, while mostcarriers including Vodafone India have sharply cut data pricesto boost usage.
Mumbai-based Reliance Communications said quarterly netprofit surged to 2.34 billion Indian rupees ($37 million) forits fiscal second quarter to Sept. 30, excluding the gain from abusiness restructuring provision write-back, far ahead ofanalysts' estimates of 1.46 billion rupees net profit.
Including the write-back, net profit jumped to 6.75 billionrupees and it was the company's first profit rise in fivequarters. Operating revenue grew 3.7 percent from a year earlierto 53.94 billion rupees.
Average revenue per user (ARPU), a key operating metric,declined 7 percent from previous quarter, while revenue perminute (RPM) fell 5.7 percent sequentially to 0.434 rupees inwhat is usually seen as a seasonally weak quarter for Indiantelecoms due to outages and power cuts in monsoon rains.
Vodafone India reported a 3.4 percent sequential decline indecline in ARPU, but RPM was little changed at 0.468 rupees.
VODAFONE INVESTMENT, RELIANCE DEBT WOES
Vodafone is taking full control of its Indian unit by buyingout from local partners the 15.5 percent stake it does notalready own in a $1.6 billion deal, and also plans to investadditional capital in the unit.
Vodafone India CFO Colman Deegan said on Tuesday the groupwas yet to determine how much it would invest in the Indian unitby subscribing to fresh equity. Vodafone Group Plc's CEOseparately said it would definitely consider an IPO of theIndian unit after a more than $2 billion tax case is settled.
Reliance Communications the most-leveraged among listedIndian carriers with net debt of $6 billion as of end-June, hasbeen planning to cut the debt load by selling assets and raisingfunds. The company did not give an update on the debt reductionplan in the earnings statement.
Reliance Communications had reported a profit fall in 14 ofthe 16 quarters to end-June, mainly hit by higher interestcosts. Ahead of the results, Reliance Communications shares fell5.2 percent to 129.20 rupees in a Mumbai market that closed 1percent lower.
