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KDDI Corp has reported a 27% gain in profit for Q3 2008, and remains on track to reach its full-year forecast of $4.4 billion.

The company earned 138.5 billion yen ($1.4 billion) for the quarter.

The company's full-year forecast is below market analysts' expectations - a Reuters Estimates poll of 16 analysts places the average forecast at $4.7 billion.

This result is particularly impressive because most Japanese companies are busy downgrading their yearlong estimates due to the uncertain global economic climate.

According to BusinessSpectator, KDDI has benefited from switching to a new business model whereby the company charges more for handset purchases in return for cheaper calling fees.

While the move has slowed handset sales, it has increased operator profits as they now have to pay lower subsidies to phone manufacturers.