MTS , Russia`s largest mobile phone operator, posted a better-than-expected 35 percent rise in third-quarter earnings on Tuesday, helped mainly by growth in usage. Net profit to U.S. Generally Accepted Accounting Principles was $654.7 million, compared with $486.3 million in the third quarter of 2006 and the average forecast of $583.9 million in a Reuters poll of nine analysts. The U.S.-listed firm, controlled by services conglomerate Sistema , said revenues rose 23 percent from a year ago to $2.22 billion, in line with an average forecast of $2.21 billion in a Reuters poll. MTS, or Mobile TeleSystems, said the monthly average revenue per user amounted to $10.0 in Russia, up from $8.6 a year ago and in line with analysts` average forecast of $10.1. In Ukraine, the second-biggest market for MTS, ARPU fell to $7.3 per month from $8.7 a year ago, slightly exceeding analysts` expectation of $7.1. The company said operating income before depreciation and amortisation increased 22 percent to $1.17 billion, roughly in line with the poll figure of $1.16 billion. OIBDA margin fell to 53.0 percent from 53.6 percent in the third quarter of 2006, above the expected 52.4 percent. MTS said its free cash flow exceeded $1 billion in the first nine months of the year. Its total debt stood at $3.1 billion as of Sept. 30, while net debt was $2.4 billion. MTS stock last traded at $88.45 on Monday.