VIENNA, August 20, 2008 (AFP) - Austrian telecoms giant Telekom Austria said Wednesday that sliding earnings in its fixed-line business led to a sharper-than-expected decline in bottom-line profits for the first half of this year.

Telekom Austria said in a statement it booked net profit of 226 million euros (334 million dollars) in the period from January to June, a drop of 18.6 percent over the same period a year earlier.

In addition to falling profits in the fixed line business, Telekom Austria also faced higher-than-planned interest payments in connection with its acquisition of MDC in Belarus, the statement said.

Operating profit -- revenues minus operating expenses -- was down 4.9 percent at 389.9 million euros, while revenues or sales were up 7.7 percent at 2.536 billion euros in the January-June period.

Earnings per share fell to 0.51 euros from 0.61 euros.

The increase in revenues was attributable to the first-time consolidation of a 70-percent stake in MDC, which owns Belarus's mobile brand Velcom, and growth in Telekom Austria's other foreign units, it explained.

The Austrian giant is expanding eastwards to help offset declining profitability on its home market, one of the most competitive in Europe where underlying profits in its fixed line business slumped by as much as 47 percent in the first half.

Telekom Austria is also present in Croatia, Slovenia, Serbia and Macedonia.

Chief executive Boris Nemsic affirmed Wednesday the company's goal of limiting the decline in bottom-line profits throughout the whole of 2008 to 12 percent and keeping operating profit stable.