UPDATE 1-Manitoba Telecom 3rd-quarter profit falls

* EPS falls to C$0.67 from year-ago C$0.74

* Revenue declines 3.5% to C$462.9 mln

TORONTO, Nov 5 (Reuters) - Regional communications company Manitoba Telecom Services Inc (MBT.TO) reported a lower quarterly profit on Thursday, which it said reflects ongoing economic challenges for Canada's business market.

Manitoba Telecom said it earned C$156.9 million ($148 million), or 67 Canadian cents a share, for the third quarter. That was down from a profit of C$165.1 million, or 74 Canadian cents a share, a year earlier.

Revenue fell to C$462.9 million from C$479.9 million a year earlier.

Free cash flow declined 12 percent to C$62 million, the company said.

Analysts on average had expected the company to earn 66 Canadian cents a share on revenue of C$464.5 million, according to Thomson Reuters I/B/E/S. ($1=$1.06 Canadian) (Reporting by Susan Taylor and Wojtek Dabrowski; editing by Gerald E. McCormick)