Telekom Austria Group has reported that its first half revenues decline by 5.8% to EUR 2.39 billion (US$3.37 billion) primarily driven by lower fixed line revenues. EBITDA decreased by 5.2% to EUR 904.8 million (US$1.28 billion) while operating costs decline by 6.7%. Net income fell by 25.8% to EUR 167.6 million (US$236.5 million), from EUR 226 million a year ago.

The company recorded growth of 10.1% to 18.1 million mobile customers, while fixed line losses were reduced to 20,600 lines over the six months.

Total capital expenditures decreased from EUR 350.3 million to EUR 265.3 million driven by a reduction of capital expenditures in both segments due to postponements and restrictive invest-ment policy.

Ferce competition and the economic slowdown in the Bulgaria, Croatia and Slovenia markets led to price cuts and declining ARPUs. The impact of the economic crisis in the consumer segment of the Groups Eastern and South-Eastern operations in Bulgaria, Croatia, Slovenia and Belarus is limited. The impact is predominantly apparent in the business segment.

The Group anticipates slightly weaker revenues than originally expected for the year 2009 due to lower fixed line wholesale revenues as well as lower mobile interconnection and equipment revenues, which will be accompanied by a proportionate reduction in costs. Therefore, on a constant currency basis EBITDA guidance remains unchanged at about EUR 1.9 billion in 2009. Capital expenditures for the year 2009 are expected to amount to approximately EUR 800 million, which will result into an operating free cash flow (EBITDA less capital expenditures) of around EUR 1.1 billion.