UPDATE 1-Australia's Telstra posts H1 profit rise, eyes Asia network partners

* Telstra H1 profit up 9.7 pct to A$1.74 bln

* Network applications business posts record growth

* Talks ongoing with potential partners in Asia

(Adds quotes, details on NAS, share move)

SYDNEY, Feb 13 (Reuters) - Australia's biggest phone company Telstra Corp Ltd on Thursday said its first-half net profit jumped 9.7 percent, driven by its core mobile business and record revenue growth in network services.

Telstra announced its first interim dividend rise in eight years after posting net profit after tax of A$1.74 billion ($1.57 billion) for the six months ending December 2013, compared with A$1.59 billion a year earlier.

Net profit excluding one-off items rose 19.6 percent to A$1.96 billion, beating four analysts' forecast of A$1.7 billion, according to Reuters data.

Chief Executive David Thodey said Telstra was courting potential partners in Asia, targeting firms that provide network applications and services (NAS) such as cloud storage and security applications with corporations and governments.

"We've got a number of discussions going on at the moment," he told a media briefing, declining however to provide details due to the early stage of the discussions.

Telstra announced the sale of its Hong Kong mobile phone business and 70 percent of its Australian directories unit over the past two months, adding A$2.5 billion to the company's acquisitions armoury once the deals are complete.

NAS is the fastest-growing unit in Telstra and reported a record 29 percent rise in revenue to A$821 million - or 6.4 percent of the total - in the first half, thanks mainly to a contract signed with Australia's defence department last year.

Last month, Telstra signed a deal with Telekom Indonesia to form a network applications joint venture in Southeast Asia's biggest economy. It also bought two small NAS providers in Australia during the first half to enhance its NAS portfolio.

Telstra shares gained 1.1 percent to A$5.17 at 0216 GMT, against a 0.1 percent rise in the broader market.

Total revenue rose 4.1 percent to A$12.8 billion, just ahead of analysts' forecasts of A$12.7 billion. Revenue from its core mobile phone business grew 6.4 percent to A$4.86 billion, with a 5 percent rise in its customer base.

Telstra confirmed its full-year guidance of low single-digit revenue growth, and increased its interim dividend by half a cent to 14.5 cents per share.

Telstra said in September it would cut 1,100 jobs by mid-2014, and media reported on Thursday the company may outsource 1,000 jobs offshore.

"We continue to grow our international business ... but in other areas we make productivity improvements and simplify the business," Telstra chief financial officer Andy Penn told Reuters after the results, declining however to comment on the media reports.

"We will continue to reshape our work forces." ($1 = 1.1070 Australian dollars)

(Reporting by Maggie Lu Yueyang; Editing by Stephen Coates)

((maggie.luyueyang@thomsonreuters.com)(+61 2 93731819)(Reuters Messaging: maggie.luyueyang.thomsonreuters.com@reuters.net))

Keywords: AUSTRALIA TELSTRA/