Mobistar keeps costs low in second quarter to beat expectations

BRUSSELS (Reuters) - Belgian mobile phone operator Mobistar on Thursday posted better-than-expected core profit in the second quarter, as it kept costs low and saw fewer customers left for other operators.

The group, which is 52.9 percent owned by French company Orange, said its cost-cutting programme was ahead of schedule, with 36 million euros (28.44 million pound) of savings made in the first half of the year.

Overall, core profit fell 12 percent in the second quarter from last year to 72.5 million euros, above the 66.8 million expected in a Reuters poll of six analysts.

Revenue, down 3.3 percent, to 312.2 million euros, was just below consensus expectations.

The group repeated its guidance for a 2014 core profit between 250 and 280 million euros, down from the 336 million euros achieved in 2013.

The Belgian market has been very competitive, partly because of a new law limiting the tie-in period on a telecoms customer contract to six months.

Cable operator Telenet, which uses Mobistar's network to deliver mobile phone services, has been one of the big gainers in the market.

Mobistar lost 52,700 customers in the second quarter, an improvement in the rate of decline from the first quarter, when 79,000 customers left. Average spending per customer rose to 23.9 euros from 23.4 euros per month.

(Reporting by Robert-Jan Bartunek; editing by Philip Blenkinsop)