TIM posts flat Q3 profit as revenue growth slows

* 318 mln reais Q3 net income misses forecast

* Sales growth slips to 8 pct, from 20 pct in recent qtrs

SAO PAULO, Oct 30 (Reuters) - TIM Participaçoes, Brazil's second-largest wireless phone company, posted flat third-quarter profit on Tuesday, as a subscriber base bigger than a year ago helped make up for a recent slowdown in sales and costs associated with growing regulatory pressure.

The Brazilian unit of Telecom Italia said net income in the quarter rose by just 0.4 percent from the year before to 318 million reais ($157 million). The result fell short of a forecast of 352 million reais in a Reuters poll of analysts.

Revenue growth slowed in the quarter to 8 percent from a year earlier, as cooling demand and regulatory pressure marked the end of red-hot growth earlier this year. Annual revenue growth averaged around 20 percent for the 12 months until March.

TIM received the brunt of a regulatory crackdown in July, when Brazil's telecommunications regulator banned it from selling new cell phone lines in 19 states for 10 days, until it presented plans to invest more in improved service.

The ban and its effect on TIM's brand dragged new subscriber growth to just 0.8 percent in the three months through September, down from 6.6 percent in the same period of 2011.

TIM shares rose 3.99 percent to 7.30 reais per share on Tuesday ahead of the earnings release, recovering from a 22-month low on Friday.

Stiff competition also weighed on TIM's average revenue per customer, a gauge of profitability known as ARPU, which fell 11 percent from a year earlier to 18.9 reais.

Earnings before interest, taxes, depreciation and amortization, a gauge of operating profit known as EBITDA, rose 3.8 percent from a year earlier to 1.202 billion reais. The figure was 1 percent lower than EBITDA of 1.214 billion reais in the second quarter.

Analysts polled by Reuters had expected EBITDA of 1.228 billion reais.

EBITDA as a share of net revenue, a measure of profitability known as the EBITDA margin, fell to 25.5 percent in the third quarter from 26.5 percent a year earlier.