Verizon Communications Inc posted a higher-than-expected quarterly profit after a 12 percent increase in revenue, helped by its purchase of smaller rival Alltel and growth in cell phone customers.

Verizon Wireless, a venture of Verizon and Vodafone Group Plc, added 1.3 million net new customers in the quarter, compared with the average estimate of 1.2 million from six analysts contacted by Reuters.

Verizon surpassed AT&T Inc as the biggest U.S. mobile service when it bought Alltel in January. Verizon Wireless ended the quarter with 84.1 million retail customers, including additions from the Alltel acquisition.

Profit, excluding noncontrolling interest, rose to $1.65 billion, or 58 cents per share, from $1.64 billion, or 57 cents a share, a year earlier, Verizon said on Monday.

Earnings excluding items rose to 63 cents a share from 61 cents, exceeding analysts' average forecast of 59 cents, according to Reuters Estimates.

Revenue rose 11.6 percent to $26.59 billion.

Shares of Verizon were flat at $31.00 in trading before the New York Stock Exchange opened.

Over the past few years, Verizon has relied heavily on its wireless service for growth amid a slowdown in its traditional phone business.

It has, however, been building out its own fiber-based network called FiOS to deliver high-speed Internet and video services to compete with cable television operators, such as Time Warner Cable and Comcast Corp.

Verizon said it added 299,000 FiOS TV customers, bringing its total to 2.2 million, and 298,000 FiOS Internet customers, for a total of 2.8 million.

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