UPDATE 3-Telia to share Danish network, repeats outlook

* Telia repeats 2011 outlook at investor presentation

* CEO says expects solution to Turkcell dispute this year

* Telia, Telenor to share Danish network

(Adds CEO comment)

By Simon Johnson and Olof Swahnberg

STOCKHOLM, June 14 (Reuters) - TeliaSonera (TLSN.ST) said it will share mobile phone networks with rival Telenor (TEL.OL) in Denmark to protect margins as it repeated its 2011 forecast of only slight growth in its markets.

Strong economic recovery, surging smartphone and mobile internet use and strong emerging market growth have helped Telia bounce back quickly from the global downturn.

But the first quarter this year was more sluggish in the Nordic region and in Spain and Telia cut its sales growth forecast for the year.

"The first quarter was a little worse and weaker than we had expected," CEO Lars Nyberg told reporters on the sidelines of a presentation to investors and analysts.

"Now we have to wait for the second quarter to finish," Nyberg said, adding that the company took a step-by-step approach to adjusting its targets.

In the longer term, Nyberg was positive about prospects for growth, both in more mature markets where exploding data traffic is driving revenue expansion and in countries like as Nepal, Uzbekistan and Kazakhstan, where mobile penetration is low.

In Sweden, Nyberg said the telecoms market could grow slightly faster than GDP and Telia, as the biggest operator, would not be able to grow faster than the market.

Operations in emerging markets will be the key area of growth, Nyberg said.

TeliaSonera, which pulled out of bidding for Poland's number two mobile operator Polkomtel last week, said it remained focused on increasing its stake in operations where it did not have a controlling interest, but would also look at acquisitions in and around its current geographical footprint.

One area where Telia has run into trouble in consolidating its ownership is Turkcell (TCELL.IS), where Europe's fifth biggest telecoms firm has been fighting a long legal battle with Turkish conglomerate Cukurova over a disputed share sale.

"I think that the deadlocked position is going to be unlocked one way or another," Nyberg said. "Someone is going get stronger control or maybe total control."

Shares in Telia were down 0.5 percent at 46.90 crowns at 1218 GMT, while the key Stockholm index .OMXS30 was up 1.3 percent.

SHARING

With revenue growth slowing to around 3 percent this year in local currencies and the company also facing headwinds from a strong Swedish currency, Telia is focused on cutting costs.

It repeated cost growth would be less than sales, meaning its core margin would improve compared with last year.

The deal with Telenor (TEL.OL) in Denmark is one measure to cut costs. It gave no figures on savings from the deal, which covers second, third and fourth-generation mobile infrastructure, but said it would have a significant effect on results. Telenor also gave no financial details.

Network sharing has become a popular tool among telecoms operators as they look to reduce investment and focus on value-added services rather than infrastructure. Some players, however, see the network as a key competitive asset.

Telenor already shares a 4G network in Sweden with Tele2. (TEL2b.ST) Telia shares a 3G network with Tele2 in Sweden. (Editing by Will Waterman and Mike Nesbit)