JERUSALEM, May 18 (Reuters) - Bezeq Israel Telecom reported a 21.5 percent rise in quarterly profit, boosted by lower tax expenses as a drop in revenue from phone services offset higher Internet revenue.
Bezeq, Israel's largest telecoms group, said on Thursday it earned 350 million shekels ($97 million) in the first quarter, up from 288 million a year earlier.
Revenue slipped 4.1 percent to 2.45 billion shekels, due to a drop of 6 percent in telephony, while high-speed internet revenue grew 3.8 percent. Tax expenses slid 38.3 percent to 113 million shekels.
Bezeq was forecast to earn 358 million shekels on revenue of 2.49 billion shekels, according to a Reuters poll of analysts.
The company, which is facing regulatory uncertainty regarding its ability to merge its units, reiterated its 2017 net profit estimate of 1.4 billion shekels, compared with 1.24 billion in 2016.
In Bezeq's fixed-line segment, where most of its growth stems, net profit dipped 2.7 percent.
Its Pelephone unit, Israel's third-largest mobile operator which faces stiff competition, saw a 23.1 percent increase in net profit to 16 million shekels as its subscriber base rose to 2.43 million from 2.40 million at the end of 2016.
$1 = 3.6110 shekels Reporting by Steven Scheer; Editing by Tova Cohen