UPDATE 2-Vivendi cuts costs to counter mobile slump

* H1 EBITA down 12.7 pct to 2.9 bln euros

* SFR plans to cut 500 million euros annual operating costs

* No rush to act on Vivendi portfolio review-CFO

* Breakup of telco and media units not now on table-CFO

* Shares climb 3.8 percent

By Leila Abboud

PARIS, Aug 30 (Reuters) - French media and telecoms firm Vivendi is in no rush to sell assets and has no current plans to split in two, it said on Thursday, as it unveiled 500 million euros of cost cuts to cope with cut-throat competition at its French mobile phone arm SFR.

Sliding sales at SFR, which has been hammered by a price war sparked by rival Iliad, drove a 13 percent drop in the conglomerate's first-half earnings, broadly in line with expectations.

A protracted share slide has led Vivendi to hire bankers to review its businesses and study the potential sale of video games maker Activision Blizzard and Brazilian telecoms arm GVT.

The departure of its previous chief executive two months ago, after a clash with the board over strategy, has also prompted speculation about an outright break up of the company.

"We feel a necessity to move vis a vis our shareholders, but this is not 2002, we don't have to sell anything or do anything immediately," said Chief Financial Officer Philippe Capron, referring to Vivendi's brush with bankruptcy a decade ago that triggered a fire sale of assets to cut debt.

He said a break up of the company into separate telecom and media businesses was not currently being considered because of the impact it would have on the group's debt and bondholders.

Shares in Vivendi rose as much as 3.8 percent as investors welcomed the details of the plan to cut annual operating costs at SFR by 500 million euros ($626 million) by the end of 2014.

UBS analysts described that as a "sizeable number" and said it could lead to roughly a 10 percent improvement in consensus earnings per share forecasts for 2014.

NEW REALITY

Vivendi said the cost cuts would come from voluntary redundancies as well as savings all over the business including procurement, marketing, and information technology.

Capron added there would be further "variable" cost cuts in addition to the 500 million euros, but did not provide details.

SFR managed to slow mobile client losses to 53,000 in the second quarter amid a price war touched off by Iliad's 'Free Mobile' service, which offers lower prices and simpler tariffs with two offers at 2 euros ($2.51) or 19.99 euros per month.

First-half sales at SFR, which generates most of Vivendi's cash, fell 5.9 percent to 5.76 billion euros, while earnings before interest, tax, depreciation and amortisation (EBITDA) fell 5 percent to 1.85 billion euros.

"We are suffering from the price reset in the French mobile market," said Capron. "We have to adapt to the new reality."

Vivendi saw overall first-half revenues slip 1.2 percent to 14.1 billion euros, while earnings before interest, tax, and amortisation (EBITA) dropped 12.7 percent to 2.9 billion euros. Analysts had expected sales of 14.04 billion and EBITA of 2.93 billion, according to a Reuters poll of 8 analysts.

The EBITA weakness came from SFR and certain accounting rules at Activision, which affect how Vivendi can book revenue from video games its publishes.

Vivendi confirmed its annual profit target this year, as well as SFR's guidance for a 12-25 percent decline in EBITDA.