Telecom New Zealand has reported a 25% drop in net profits for its second quarter to the end of December 2007, from NZD229 million (USD180 million) to NZD172 million. The fall is attributed to increased tax expenses in the most recent quarter, plus the absence of earnings from the Yellow Pages business which was sold last year. Sales for the period were up 2.1% year-on-year at NZD1.42 billion, while EBITDA increased 4.4% to NZD453 million. Revenues at Telecom’s cellular subsidiary were hit by declining voice usage and handset sales, falling 4.7% to NZD201 million. The firm had 2.12 million mobile customers at the end of December, up 13% from end-2006. Though traditional telephony services continue to fare badly, the broadband internet segment reported a 3.6% rise in sales to NZD86 million. Telecom had 674,000 broadband customers at the end of 2007.