UPDATE 1-TPSA Q1 net drop 13 pct, beats consensus

WARSAW, April 22 (Reuters) - Poland's top telecoms group TPSA beat market consensus with a less-than-expected net profit drop of 13 percent in the first quarter, as regulatory pressure and competition squeezed margins.

The operator, unit of France Telecom, on Wednesday said it posted a bottom line of 285 million zlotys ($99 million), compared to 276 million seen in an analyst poll.

Sales, down 10 percent year-on-year to 3.873 billion, came in almost in line with market expectations of 3.877 billion.

TPSA has suffered from the shrinking fixed-line market as have many other former national monopolies around Europe. It also lost its top spot in the cellphone market and has been under pressure from the regulator UKE to cut mobile rates.

'Because the impact of mobile rate cuts implemented in 2009 on our sales will be gradually lessening, we expect improvement in trends on the top-line level,' TPSA Chief Financial Officer Roland Dubois said in a statement.

In its midterm strategy, TPSA said it expected its sales deterioration will slow down below last year's pace of 8.8 percent before stabilising in 2011.

'We have to wait for a decisive change in our earnings until the second half of the year, but the first quarter stands as a good beginning to a breakthrough year of 2010,' TPSA Chief Executive Maciej Witucki said.

TPSA's shares were last year's worst performers in Warsaw's large cap index after shedding 17 percent and have underpeformed the market this year with a 4.5 percent rise.

(Reporting by Adrian Krajewski; Editing by Mike Nesbit)

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