Telus Corp. is increasing its quarterly dividend following a surge in third-quarter earnings, which were helped by sharp growth in revenue from smartphone data services at its wireless division.

Smartphone customers, using the Internet, watching video and sending emails, drove up wireless data revenue by 23 per cent and pushed up the wireless division's overall revenue by seven per cent.

Telus increased its dividend by three cents to 64 cents per share to be paid on Jan. 2 to shareholders of record on Dec. 11.

"We look forward to continuing to deliver strong operational and financial results to support the realisation of our dividend growth ambitions through our 2013 commitment and beyond," Telus CEO Darren Entwistle said in a news release.

The Vancouver-based telecom company said Friday that its third-quarter net income rose eight per cent to $351 million or $1.07 per diluted share. That's up from $325 million or $1 per diluted share in the same 2011 quarter.

Revenue rises 5.8%

Overall revenue rose 5.8 per cent to $2.77 billion from just over $2.6 billion in the third quarter of 2011. About $102 million of the increase was from wireless data services, which accounted for $540 million in the quarter.

Analysts estimates compiled by Thomson Reuters called for revenue of $2.74 billion.

Blended average revenue per user in the wireless division increased by 90 cents, or 1.5 per cent, to $61.42 a month.

Telus said it attracted 116,000 net new postpaid wireless customers in its third quarter, usually on lucrative three-year smartphone contracts.

By comparison, Bell previously reported it had 149,000 net new wireless postpaid subscribers in its third quarter and Rogers had 76,000.

Wireline revenue, which includes TV, Internet and traditional phone services, grew by four per cent to $1.27 billion.

Telus added 42,000 new TV customers, down 8,000 year-over-year.

The total number of Telus TV subscribers increased 41 per cent to 637,000, up by 184,000 from a year ago.

Telus had net additions of 26,000 customers for its high-speed internet, 18 per cent higher than the same quarter in 2011. The company has 1.3 subscribers for its high-speed Internet, up seven per cent year-over-year.

Total network access lines declined 5.3 per cent from a year ago to 3.45 million.

Residential lines are down 7.7 per cent year-over-year, reflecting ongoing competition and wireless and Internet substitution.

Telus will have a single class of shares after shareholders voted strongly in favour of the idea last month, defeating a U.S. hedge fund's attempt to get a premium for holders of the company's voting shares.

The Vancouver-based telecom and New York's Mason Capital Management battled for months over the company's one-for-one share conversion plan with no premium.

Entwistle has slammed the hedge fund for what he called its "empty voting" tactics and said Telus would push for regulatory change to prevent that in future.

High-speed Internet customer base grows

Telus also opposed rival Bell's friendly takeover of Astral Media, saying it would control too much of the English-language television market.

The CRTC recently killed the $3.4-billion takeover, saying it wasn't in the best interests of Canadians.

Telus is the only major telecom company in Canada that doesn't own media or television assets for content to put on the mobile devices its sells.

Telus said its chief financial officer Robert McFarlane will retire at the end of the year after 12 years with the company.

He will be replaced by John Gossling effective January 1 after a transition period. Gossling was CFO of CTVglobemedia from 2008 to 2011.