VIENNA (Reuters) - Telekom Austria (>> Telekom Austria AG) sidestepped suggestions on Monday that major shareholder Carlos Slim might try to take the company over after the Mexican tycoon bid for the rest of its Dutch peer KPN (>> KPN KON).

Unveiling results showing competition remained cutthroat, Chief Executive Hannes Ametsreiter declined comment on bid speculation that pushed Telekom Austria's share price sharply higher on Friday.

Slim's America Movil (>> America Movil SAB de CV), which bought large stakes in KPN and Telekom Austria a year ago in its first foray into Europe, offered 7.2 billion euros (£6.2 billion) on Friday for the 70 percent of KPN it does not already own.

"Clearly, we cannot comment on the intentions of our shareholder because they are not communicated to us in every detail," Ametsreiter told reporters when asked whether he expected a similar bid.

Shares in Telekom Austria, in which America Movil owns almost 24 percent, fell 2.2 percent to 5.60 euros by 1112 GMT, following the rise of almost 9 percent on Friday on the KPN bid news.

Slim bought into the two European telecoms operators at prices that appeared cheap as both battled fierce competition in their home markets that they could only partially offset by operations abroad.

KPN's shares are now trading at less than a third of what Slim paid, and Telekom Austria stock has also tumbled from the 9.50 euros per share he paid.

If Slim were to bid for more Telekom Austria stock, he would be obliged under Austrian law to offer the same 9.50 euros to remaining shareholders, but that obligation expires on September 25.

Slim's bid for KPN is a major blow to arch-rival Telefonica (>> Telefonica SA), which made an $11 billion offer last month for KPN's crown jewel, Germany's E-Plus. The two rivals together control about 60 percent of Latin America's mobile markets.

Telekom Austria, by contrast, does not compete with Telefonica in any of its markets: Austria, Bulgaria, Croatia, Belarus, Serbia, Slovenia, Macedonia and Liechtenstein.

The former state monopoly is still 28 percent owned by the government, and 53 percent of its staff are civil servants who are nearly impossible to dismiss.

MIXED YEAR

Telekom Austria reported unremitting competition in its major markets of Austria, Bulgaria and Croatia that contributed to a 10 percent drop in second-quarter core profit, despite consolidation of the Austrian market to three operators.

The company said it had doubled spending on handset subsidies and marketing in the first half in a bid to retain affluent customers it hopes will stay loyal and raise their spending on data, calls and text messages.

Churn, the rate at which customers leave, remained stable, Chief Financial Officer Hans Tschuden said.

Telekom Austria's mobile customer base grew 4 percent to 21 million following the integration of budget brand Yesss, which it acquired as a side deal to the takeover of Orange Austria by Hutchison Whampoa (>> Hutchison Whampoa Limited) at the start of the year.

But average revenue per user in its main market, Austria - where Hutchison still offers all-inclusive mobile deals for 7.50 euros per month - fell 15 percent to 16.2 euros per month.

Second-quarter comparable earnings before interest, tax, depreciation and amortisation (EBITDA) fell to 330 million euros, slightly below the average Reuters poll forecast, while sales fell 2 percent to 1.04 billion euros.

"Overall, a solid set of numbers that should see consensus EBITDA rise closer to our estimates," Citi research analysts wrote in a note.

Telekom Austria reiterated it expected full-year revenues of 4.1 billion euros, down from 4.33 billion last year, but trimmed its investment plans for 2013, saying its previous target of 700 million euros was now a maximum.

"As expected, 2013 is turning out to be a mixed year," Ametsreiter said in a statement. "Our cost-cutting measures are partly compensating for the declines in revenues."

Telekom Austria repeated that it planned to save at least 100 million euros in costs this year, but said spending on acquiring and retaining customers had gone up to 83 million euros in the first half from 42 million a year earlier.

(Reporting by Georgina Prodhan; Editing by Michael Shields and David Stamp)

By Georgina Prodhan