New Zealand's dominant phone provider, Telecom Corp, posted a 10 percent rise in first-quarter net profit because of a one-off tax gain on Friday and has lifted its full year forecast. Telecom has defied the expectations of analysts by reporting a 64,000 net increase in mobile connections on its ultra fast XT network, during the three months.

Telecom, which competes with Australia's Telstra and British mobile company Vodafone, reported July-September net profit of NZ$163 million (US$117 million) against NZ$149 million a year ago, and an average of NZ$87 million of seven analysts surveyed by Reuters.

"We have been successful in a market that has seen a significant rise in competition and customer choice", Telecom chief executive Paul Reynolds said in a statement. Shares in Telecom closed on Thursday at NZ$2.48. The stock has gained 11.2 percent so far this year, compared with a 16 percent rise in the NZSX-50 index. Telecom raised its forecast for 200-10 full year net profit to between NZ$400 million and NZ$440 million from a previous range of NZ$370 million to NZ$410 million.