(Adds CEO comments)
SAO PAULO, Feb 1 (Reuters) - Cielo SA, Brazil's largest payments solutions firm, had a 2.7 percent fall in net revenue in the fourth quarter over the prior year, as competition increased and the government tightened regulation on credit card processing firms.
Net revenue was 3 billion reais ($947 million) for the quarter. Net revenue fell 5.7 percent for the full 2017 year relative to 2016.
Chief Executive Eduardo Gouveia said the company expects to raise total transaction value by 4 to 6 percent this year. The CEO said the company may lose market share in 2018, with increased competition from newcomers.
The company did not disclose its market share in the fourth quarter, but it had around 53 percent in September, according to a presentation to analysts, lower than the 54 percent a year earlier.
New competitors such as Stone Pagamentos SA and PagSeguro Digital Ltd - which listed last month on the New York Stock Exchange - have been quickly expanding in Brazilian payments market.
Gouveia said the larger Brazilian card processing companies will aim to maintain profitability as newcomers grab market share. Cielo's net income in the fourth quarter was 1.04 billion reais ($328 million), in line with analysts' estimates and 3.1 percent above the same period a year earlier.
But the company missed estimates for earnings before interest, taxes, depreciation and amortization, a common gauge of operational profitability known as EBITDA with 1.3 billion reais in the fourth quarter, below a consensus of 1.6 billion reais compiled by Thomson Reuters.
Management will discuss results on a conference call with investors on Friday. ($1 = 3.1668 reais) (Reporting by Carolina Mandl and Tatiana Bautzer; Editing by Chris Reese and Cynthia Osterman)