PREVIEW-NZ's Telecom Corp Q3 profit to fall sharply

* What: Telecom Corp. of NZ Q3 earnings

* When: Friday, May 2

* Earnings to continue to fall

By Adrian Bathgate

WELLINGTON, April 29 (Reuters) - Telecom Corp of New Zealand Ltd (TEL.NZ: Quote, Profile, Research, Stock Buzz) is expected to report quarterly net profit fell sharply as increased regulation and competition erode its market dominance.

The government has forced Telecom to split into three arms and open its networks to other firms to increase competition and speed up access to broadband Internet services around the country.

Investors will be looking at how deep Telecom's earnings have fallen compared to previous forecasts, and whether there are signs of recovery in the key broadband and mobile markets, said analyst Guy Hallwright of brokerage Forsyth Barr.

"They said some time ago the third quarter would be the worst this year, so I don't think we'll be looking at anything new," Hallwright said, adding that a recent analyst briefing day had provided much of the information the market would normally look for from the result.

The average forecast from eight analysts surveyed by Reuters was for quarterly net profit after tax of NZ$162 million ($128 million), compared with NZ$238 million last year.