Vienna - Austrian telecommunications provider Telekom Austria AG said Wednesday its third-quarter net profits had dropped by 6.2 per cent to 163 million euros
(207 million dollars), mainly due to higher interest expenses after it acquired Velcom last year.

Operating income rose to 262 million euros, increasing by 1.5 per cent from the third quarter of 2007.

The takeover of Belarus mobile phone operator Velcom dampened profits, but also boosted Telekom Austria's revenues, which grew by 4 per cent to 1.33 billion euros.

As the Austrian company has seen its fixed-line business decrease by 600,000 customers over the last four years, it announced earlier this week that it would lay off 1,250 employees in that segment in the course of 2009.

Because of the necessary non-cash provisions for the restructuring costs, Telekom Austria said it expected a "slightly negative" result for this year, compared with a net profit of 493 million euros in 2007

"Although these measures will influence the results of the fourth quarter of 2008, they will have no effect on the operating performance and cash flow of the Telekom Austria Group," chief executive Boris Nemsic said. (dpa)