UPDATE 1-Telkom to save $245.7 mln on cost cutting

* Will retain compliance with Sarbanes

* To save $245.7 mln on cost cutting after two years

* Shares down 2 pct

(Adds CEO, CFO quotes, shares)

JOHANNESBURG, June 23 (Reuters) - South African fixed-line phone firm Telkom SA Ltd (TKGJ.J) expects to save about 2 billion rand ($245.7 million) on cost cutting after two years, its chief financial officer said on Tuesday.

Telkom said on Monday when releasing its full-year results it was targeting an operating cost reduction of 10 percent over the following three financial years.

"(There will be cost savings of) 2 billion rand after two years," Peter Nelson, Telkom's chief financial officer, said in a conference call.

As part of its cost cutting initiative, Telkom said on Monday it would delist from the New York bourse as maintaining a listing in the United States was expensive.

"We will still take care of compliance with governance that has to do with Sarbanes-Oxley (corporate governance compliance law). Our cost reduction will be between 30-40 million rand," Telkom Chief Executive Reuben September said.

Telkom, the dominant fixed-line operator in Africa, said it would keep a Level 1 American Depositary Receipt programme to facilitate over-the-counter trading in the United States.

September said there would be no sacred cows when it comes to cost cutting, but natural attrition gave the company an opportunity tr deal with costs.

Telkom shares were trading 1.99 percent lower at 34.40 rand by 0747 GMT, in line with weaker JSE Top-40 index of blue chips .JTOPI.

(Reporting by Gugulakhe Lourie)