* Q4 revenue down 13 pct to 2.65 bln shekels

* Sees 2012 profit, revenue similar to 2011

* To pay dividend of 1.074 bln shekels (Adds details, chairman's quote)

JERUSALEM, March 14 (Reuters) - Bezeq Israel Telecom , Israel's largest telecoms group, reported a 9 percent fall in quarterly net profit on Wednesday, hurt by regulatory changes that sharply reduced fees received from other operators.

Bezeq posted fourth-quarter net profit of 524 million shekels ($138 million), down from 575 million a year ago, but above a Reuters consensus of 475 million.

Revenue slipped 13 percent to 2.65 billion shekels, below expectations of 2.77 billion.

Bezeq blamed a steep reduction in the fees paid to it by other operators for the revenue erosion. A new fee framework for such payments - called mobile termination rates and paid when another network is used to complete a call - was imposed at the beginning of 2011 and has hit the sector hard.

Once a monopoly in fixed-line calling, Bezeq has also been facing stiff competition from cable company HOT and others.

"Last year the communications market changed significantly, with restructuring into large communications groups that provide the consumer with communications services," said Shaul Elovitch, Bezeq's chairman.

"I believe that the structural changes in the communications market must continue with the cancellation of structural separation at Bezeq, which will lead to a more competitive market and significant savings in the consumers' communications expenses," he said.

In a bid to spur competition, regulators have not allowed Bezeq to merge its units - fixed line, Internet, satellite TV and mobile phone - and offer a package of services like some of its competitors.

Bezeq said its net profit, revenue and EBITDA (earnings before interest, taxes, depreciation and amortisation) will be similar to 2011 levels, while free cash flow will improve.

It declared a dividend of 1.074 billion shekels for the second half of 2011. Bezeq also will pay another 500 million shekel dividend in the third instalment of a special dividend of 1.5 billion.

Bezeq's mobile unit Pelephone, Israel's third largest cellular operator, posted a nearly 16 percent fall in quarterly revenue to 1.24 billion shekels, while net profit slid 24 percent to 204 million shekels. Its subscriber base dipped 0.4 percent to 2.847 million.

Separately, Bezeq offered to buy the remaining shares of Internet portal Walla at 5.25 shekels a share for a total of 68 million shekels - a 50 percent premium to Tuesday's closing price of 3.49 shekels. Bezeq holds 71.55 percent of Walla! (Reporting by Steven Scheer; Editing by Will Waterman)

• A Permanent Economic Emergency