Earnings for Singapore's smallest telco M1 grew in the first quarter of the year, despite a dip in its turnover.

M1 said on Monday that its net profit rose 4.4 per cent in the three months to March 31 from a year ago to hit $42.8 million.

However, its operating revenue fell 1.2 per cent in the period to $240.2 million. The telco said lower handset sales were the main reason for this.

That was partly offset by an increase in M1's service revenue, which excludes handset sales but includes sales from mobile telecommunications, international call and fixed line services. Service revenue was $203.9 million in the first quarter, up 2.1 per cent from a year ago.

M1 said this was driven by growth in its mobile customer base and higher data usage. The number of its mobile customers grew 2.9 per cent from the previous year to 2,104,000.

The company also added more fibre broadband customers. It had 90,000 such customers in the first quarter of this year, an increase of 30,000 from the year before.

Chief executive Karen Kooi said on Monday that M1 expects a rise in demand for high-speed connectivity and infocomm technology solutions from small and medium-sized enterprises. This would come on the back of the Government's $500 million infocomm technology programme announced earlier this year.

M1 shares closed up two cents to $3.29 on Monday. Its results were released after the market closed.