UPDATE 1-Mobistar sees further core profit erosion in 2014

Thu Feb 27, 2014 2:17am EST

* Guides for 2014 core profit fall between 16 and 25 percent

* Says may outsource IT department in 2014

* Says lost 260,000 customers in 2013 (Adds details on fixed products, mobile broadband)

BRUSSELS, Feb 27 (Reuters) - Belgian mobile phone operator Mobistar forecast a further fall in core profits for 2014 of up to a quarter, as the group made provisions for regulatory caps on mobile phone rates and a tax on mobile phone masts in the south of Belgium.

Mobistar expects its core profit in 2014 to be between 250 and 280 million euros ($341.67 - $382.68 million), as much as 25 percent down from the 336 million euros it made in 2013, restated for restructuring and redundancy costs.

The group said it had reduced the number of employees by 130 in 2013 and may outsource its IT operations in 2014 which would lead to a further 150-200 of its about 1,600 employees leaving the company.

Mobistar has suffered in the fight for the Belgian consumer, which was intensified by a new law limiting the maximum duration of a contract to six months, and lost about 260,000 customers in 2013.

The group said that this was partly because it did not have its own fixed network and could not offer popular "bundled" products, which combine a fixed telephone line, broadband internet and a mobile phone subscription.

Mobistar withdrew its fixed broadband internet and telephone products offered via the Belgacom network in May, saying it was unable to make a profit.

The company is now waiting for the regulator to open Telenet's cable network to competitors. Telenet already uses Mobistar's infrastructure to offer its very successful mobile phone services.

The process to open up Belgian cable networks to competitors has been slow, and Mobistar said it would only be able to launch fixed services in the fourth quarter of 2014.

The group currently has no commercial offer for high-speed mobile data (4G) and said it would wait until it had a sufficiently strong network to do so.

Belgium's largest mobile operator Belgacom already has such an offer in place and earlier this month launched 4G in the Brussels capital after a lengthy regulatory debate over mobile radiation levels. ($1 = 0.7317 euros) (Reporting by Robert-Jan Bartunek)