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UPDATE 2-Telefonica Brasil's 3rd-quarter profit rises 28 pct, lower costs help

help@ (Adds comments from CEO, details of earnings, share performance)

SAO PAULO, Oct 25 (Reuters) - Telefonica Brasil SA , the country's biggest telecommunications firm, posted a 28 percent rise in quarterly profit on Wednesday, helped by tighter cost controls and increased revenue per customer from its mobile services.

Profit at the Brazilian unit of Spain's Telefonica rose to 1.223 billion reais ($377 million), beating an average forecast of 1.177 billion reais in a Reuters survey of analysts.

Earnings before interest, taxes, depreciation, and amortization (EBITDA) rose 7.8 percent to 3.68 billion reais, roughly in line with a consensus estimate of 3.66 billion reais.

The performance of Vivo, as the carrier is branded locally, reflects an emphasis on post-paid growth and other higher-end offerings to boost profits after a three-year economic downturn.

The company, Brazil's biggest telecommunications company by usership, said average revenue per user of mobile services, or mobile ARPU, rose 2.1 percent from a year earlier. Post-paid connections rose 9.7 percent while pre-paid connections fell by 5.1 percent.

Operational costs fell by 1 percent due to spending controls across the board and a decrease in Brazil's interconnection fees between mobile and fixed-line networks, which have fallen dramatically in recent years.

Telefonica Chief Executive Eduardo Navarro told journalists that efforts to control costs would center on the transition to digital services. Vivo is particularly focused on reducing costs associated with billing, call centers, and recharging devices, he added.

The company's capital expenditures rose to 2.188 billion from 1.82 billion reais in the previous quarter.

Navarro said the company was maintaining its capital spending target of 8 billion reais for 2017, which would imply investments of 2.7 billion reais in the fourth quarter, as Vivo continues to expand its fiber-to-the-home connections and fourth-generation mobile network.

Its shares opened up 2 percent, before paring gains. They were trading up 0.5 percent in late morning trading.

($1 = 3.24 reais) (Reporting by Gram Slattery; editing by Jason Neely and Susan Thomas)