India is still adding a staggering 15 million new mobile phone connections a month but the world's fastest-growing cellular market has hit rough waters.

A cut-throat price war is hammering down call charges, putting pressure on telecom companies' earnings and share prices, and threatening a bruising shakeout in a sector that has become crowded with new players.

"The tariff reductions are hitting revenue growth and with new entrants, there's less to go round for everyone," said Religare Securities analyst Himanshu Shah.

Top Indian mobile phone firm Bharti this month announced a lower-than-expected 13-percent rise in quarterly net profit from a year earlier while profits halved at number two operator Reliance Communications.

Competition was already fierce but has become even more aggressive as new players unleash deeper price cuts with innovative per-second billing plans that have pushed call costs down to less than a cent a minute.

Some operators are offering rates as low as 0.01 rupees a second, or a fraction of a US cent.

The per-second billing was kicked off in June by the entry of Tata DoCoMo, a joint venture between India's Tata Teleservices and Japan's NTT DoCoMo.

"We've seen a wave of price cuts," said Shubham Majumder of Macquarie Research. "Definitely there's downside pressure."

Signs of the trend can be seen in the fall in average revenue per usage or ARPU ? an industry profitability measure ? which shows the amount companies make for every minute a client talks.

Reliance Communications' ARPU for the second quarter ending September slid 23 percent from the preceding quarter while Bharti's ARPU fell 9.4 percent.

Akhil Gupta, deputy chief executive of Bharti Airtel's parent, Bharti Enterprises, said the sector had been afflicted by "irrational pricing".

The ARPU drop reflected the rock-bottom tariffs as well as companies' growing reliance on lower-spending rural customers as they push deeper into India's hinterland to grow revenues.

Total telephone penetration, including landline and mobile phones, in the country of nearly 1.2 billion stands at 43 percent ? up from 2.8 percent in 2000 and testimony to the telecom sector's blistering growth.