Telecom has reported a 37 per cent drop in first-quarter net profit to $103 million. Revenues were down 2.9 per cent to $1.32 billion. Earnings, before, interest, tax, depreciation and amortisation were slightly ahead of analysts' expectations at $443 million. "Operational performance was satisfactory with good cost control offsetting significantly higher regulatory costs and intensifying competition," chief executive Paul Reynolds says. "Telecom absorbed $16m of new regulatory costs, and the impact of the Canterbury earthquake of around $3m, to achieve EBITDA that was on target and within market expectations. "On ultrafast broadband, Telecom is continuing to engage in detailed discussions with both Crown Fibre Holdings and the Ministry of Economic Development, and we await further announcements."