UPDATE 2-Greek OTE's Q2 profit grows on strong mobile ops

(Adds details, CEO comment)

By George Hatzidakis

ATHENS, Aug 28 (Reuters) - OTE (OTEr.AT: Quote, Profile, Research, Stock Buzz), Greece's largest telecoms group, on Thursday reported a rise in second-quarter profit that matched market forecasts, helped by an increased take-up for its mobile phone and Internet operations.

The former monopoly is looking to part-owner Deutsche Telekom (DTEGn.DE: Quote, Profile, Research, Stock Buzz) for help to boost its mobile business in the Balkans and secure future growth to counter falling domestic fixed-line revenues from increased competition from alternative operators.

"Our mobile operations achieved dynamic growth and market share gains in all countries," Chief Executive Panagis Vourloumis said in a statement. "We have started exploring joint areas of improvement with our new partner Deutsche Telekom."

OTE's net profit rose 17 percent to 159.3 million euros ($235.6 million). Analysts had on average forecast a profit of 158 million euros in a Reuters poll.

OTE's Cosmote mobile unit, which was fully bought out earlier this year and delisted, saw sales advance 8 percent to 794 million euros. It accounted for half of the group's revenues.

Cosmote added more than 942,000 customers in the quarter from its operations in Greece, Albania, Bulgaria, Macedonia and Romania, raising total subscribers to 17.4 million. Telekom, which owns 22 percent of OTE and has agreed to buy another 3 percent from the government, has said OTE's mobile operations were the key reason for its interest in the group.

OTE's broadband customer base reached 892,000 at the end of the quarter, out of a total ADSL market in Greece of 1.4 million, it said.

"Second-quarter results were strong overall. Operating results were underpinned by a solid performance by Cosmote," said HSBC analyst Vangelis Karanikas. "The encouraging first-quarter trends persisted through the second quarter."

Operating income before depreciation and amortisation (OIBDA) at OTE rose 6.3 percent to 578.8 million euros, while sales advanced 2.5 percent to 1.591 billion euros.

At 1042 GMT, OTE shares were up 3.52 percent.

The stock has lost 45 percent of its value this year, underperforming the Athens general stock index , which is down about 37 percent.

OTE trades about 11 times estimated 2008 earnings, at a lower P/E ratio than peers such as Deutsche Telekom, which trades at a 15 multiple, according to Reuters Estimates.

(editing by John Stonestreet)