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KPN curbs investment, says America Movil relations fine

* Cuts spending on Dutch, Belgian networks by 500 mln euros

* Says relations with America Movil cooperative

* Q3 core profit 985 mln euros vs 962 mln expected

By Robert-Jan Bartunek

BRUSSELS, Oct 22 (Reuters) - Dutch telecoms group KPN will invest less in the coming years than previously indicated, having already spent heavily on fast fixed-lines and mobile broadband, it said on Tuesday.

The group also said relations with main shareholder America Movil, controlled by billionaire Carlos Slim, remained cooperative. This month America Movil dropped plans to launch a full takeover of KPN after the Dutch firm said its offer was too low, although KPN later said talks could resume.

"They have two members on our board of directors which had a meeting ahead of today's results," KPN Chief Executive Eelco Blok told a conference call.

"In that regard we've had a good talk about the business," he added, without commenting further.

KPN said it would spend less than 4.7 billion euros ($6.4 billion) on its network until the end of 2015, compared with previous guidance of below 7 billion euros.

The latter included German unit E-Plus, set to be sold to Telefonica, on which KPN would have spent about 600 million euros a year, meaning an effective investment reduction of about 500 million euros for its remaining operations in Belgium and the Netherlands.

"KPN's investments in fixed and mobile networks in the Netherlands in recent years have been high, especially compared to peers," the Dutch group said in a statement.

It said its next generation 4G mobile service would be available in the whole of the Netherlands in the first quarter of 2014 and its high-speed fixed line broadband was ahead of European peers.

"We believe capex cuts will (and should) create a debate over the investment needs of the business," Jefferies analysts wrote in a note to clients.

KPN's shares were up 1.4 percent at 2.26 euros at 0800 GMT, making them the strongest performer on the STOXX 600 European Telecoms Index. That compares with the 2.4 euros a share offer from America Movil that KPN rejected.

KPN had increased capital spending to 17.3 percent of revenues in 2012 and, under the previous guidance, would have spent up to 20 percent of expected revenue this year.

The group reported a 13 percent fall in core profit in the third quarter, excluding E-Plus, to 762 million euros as a rise in earnings at its Dutch residential unit was not able to make up for declines in its Belgian and Dutch mobile businesses.

Including E-Plus, earnings before interest, tax, depreciation and amortisation (EBITDA) was 985 million euros, just above the 962 million expected in a Reuters poll of seven analysts.