Telekom Austria has reported a 26% fall in second-quarter net profit due to higher interest expenses, falling fixed line usage, competition in its domestic mobile market and start-up costs in Serbia and Macedonia. Net profit for the three months to the end of June fell from EUR130.6 million (USD191 million) in 2007 to EUR96.3 million this year. Analysts polled by Dow Jones had forecast a profit of EUR111 million. Sales for the period were up 5.6% to EUR1.28 billion, thanks in part to the inclusion of Belorussian cellco Velcom which was acquired in 2007. Sales at the fixed line division dropped 2.2% year-on-year to EUR521.9 million though this was offset by a 10% rise in mobile revenues to EUR814.3 million, again driven by the addition of Velcom. Total group mobile subscribers rose by 52.5% in the twelve months to end-June to 16.5 million.