UPDATE 1-No need for Tel Italia capital hike-Telefonica

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MADRID, July 31 (Reuters) - Spain's Telefonica (TEF.MC) does not see a need for a capital increase at Telecom Italia (TLIT.MI) for the time being, Chief Executive Julio Linares said on a conference call on Thursday.

"Regarding Telecom Italia we do not see a need for any additional increase of capital right now," said Linares.

Telefonica holds an indirect 6.9 percent stake in its Italian rival through a consortium called Telco, and controls 10 percent of the company's voting rights.

Speaking on the same conference call, Financial Director Santiago Fernandez Valbuena said Telefonica did not rule out further share buybacks once its current shareholder remuneration plan was completed.

He said the company would update the market on future increases in remuneration once the plan was finished later this year.

Telefonica has a 100 million share buyback plan underway, of which 67 percent has been executed.

Earlier, the company posted forecast-beating first-half core and net profit and repeated its 2008 forecast for operating income before depreciation and amortisation (OIBDA) to rise 7.5 to 11 percent.

Telefonica's shares closed up 0.42 percent at 16.73, while the Spain's blue chip IBEX-35 index ended 0.54 percent higher.

(Reporting by Robert Hetz; Writing by Tracy Rucinski; editing by Sue Thomas)