Singapore's third largest mobile operator M1 Tuesday reported a 1.8 per cent rise in first quarter net profit to $41 million due to lower cost of sales and handset subsidies.

Revenue, however, dropped 7 per cent to $243 million for the three months ended March 31.

Lower handset sales and higher customer churn in the quarter offset growth in its mobile data and fixed broadband businesses.

It lost 64,000 mobile customers, mainly prepaid users when their SIM cards expired in the quarter. As af March 31, its mobile customer base stood at 2.045 million, of whom 223,000 were on its fourth-generation (4G) network.

During the quarter, it added 8,000 fibre broadband customers bringing its base to 60,000.

M1 shares closed five cents higher at $3 before the release of its results.