UPDATE 1-Indian phone market price war hits Bharti Airtel's quarterly profit

* Q2 profit 3.43 bln rupees vs forecast 3.03 bln rupees

* Revenue down 11.7 pct

* Financial stress in industry continues - CEO (Adds details, CEO comment, background)

Oct 31 (Reuters) - India's top telecoms operator, Bharti Airtel Ltd said its second quarter profit plunged 77 percent from a year earlier, as it struggled amid a price war in the world's No.2 mobile phone market.

Indian telecom operators have been hit by the market entry late last year of Jio, Reliance Industries' telecoms venture which is backed by India's richest man Mukesh Ambani. It sparked a fierce price war by initially undercutting rival's charges.

The sector faces further price pressure after India's telecoms regulator this month cut the fee operators pay each other for calls made from one network to another.

"The financial stress in the industry continues due to double digit revenue decline and will be further accentuated by the reduction in IUC rates in the next quarter," Gopal Vittal, Bharti Airtel's chief executive for India and South Asia, said in a statement.

That will eventually lead some operators to either consolidate or exit the market, he added.

Vodafone and Idea Cellular are in the process of combining their operations in India. The merger will potentially create the biggest Indian telecoms company, surpassing Airtel, which recently increased its customer base with its acquisition of the Tata conglomerate's consumer mobile business.

Airtel's second quarter net profit of 3.43 billion rupees ($53 million) was its smallest profit in 19 quarters and its sixth consecutive drop in quarterly profit. However, it beat analysts' average estimate of 3.03 billion rupees, according to Thomson Reuters data.

Airtel's revenue fell 11.7 percent to 217.77 billion rupees. It operates in 17 countries across Asia and Africa.

Mobile services revenue in India declined about 17 percent to 122.45 billion rupees.

($1 = 64.7475 Indian rupees) (Reporting by Tanvi Mehta in Bengaluru; Editing by David Evans and Susan Fenton)