Vienna - Austria's largest telecommunications provider Telekom Austria AG on Wednesday reported a 26.3-per-cent profit drop to 96.3 million euros (141.5 million dollars) in the second quarter, as interest costs and marketing expenses affected results.

Earnings before interest, taxes, amortization and depreciation (EBITDA) rose 0.6 per cent to 469.1 million euros, compared with the second quarter of last year.

Marketing costs for the Euro football championships in June dampened earnings, the company said in a statement.

Revenues rose 5.6 per cent to 1.28 billion euros, with the consolidation of Belarussian mobile phone provider Velcom offsetting lower income from the fixed line business.

Higher interest expenses following the acquisition of Velcom in October 2007 contributed to the lower quarterly profit, Telekom Austria said.

EBITDA in the fixed-line segment fell 17.3 per cent to 155.3 million euros, as internet rates were lowered to prevent customers from giving up their fixed lines.

In the mobile business, EBITDA was up 9.1 per cent to 320.2 million euros on rising earnings from operations in Bulgaria, Croatia, Slovenia and the consolidation of Velcom.

Citing the risk for further mobile fee reductions in Austria and a decrease in fixed lines, Telekom Austria maintained its prediction of a 12-per-cent drop in net income for 2008. (dpa)