* Says will not reach 6 bln free cash flow target in 2015
* Investments in U.S., T-Systems restructuring to weigh
* Still expects to pay 2014 dividend of 0.50 euro/shr
* Shares drop 4 pct, at bottom of sector index (Rewrites, adds CEO comments from news conference,)
By Harro Ten Wolde
BONN, Germany, March 6 (Reuters) - Deutsche Telekom AG is to spend more money attracting customers to its T-Mobile business in the United States, suggesting it aims to go it alone in that market for now even though there is talk of a sale of the company.
Deutsche Telekom's decision to scrap its 2015 6 billion euros ($8.2 billion) cash flow target to invest in its U.S. arm, dashed investor hopes for dividend increases, sending its shares down sharply.
T-Mobile US Inc, 67 percent-owned by Deutsche Telekom, is the No. 4 player in the U.S. mobile market and last year added 2 million new branded post-paid customers after four years of losing subscribers.
T-Mobile's U.S. turnaround has caught the attention Japan's Softbank founder Masayoshi Son, owner of U.S. No. 3 player Sprint, who is eager to marry it with T-Mobile to take on AT&T and Verizon.
Deutsche Telekom's Chief Executive Tim Hoettges told a news conference on Thursday the group would be open to a potential consolidation in the U.S. mobile market but said the company also had no concerns about running its T-Mobile USA business.
"All our actions in the U.S. are to add value. At the moment we have no difficulties to run T-Mobile US on a stand-alone basis," he said. "If a consolidation in the US mobile market will take place, we will enter that phase with an open mind."
He denied media reports that he had told Deutsche Telekom's supervisory board that a sale of T-Mobile US was less likely.
A tie-up with Sprint would create a group with $62 billion in sales, 52 million contract customers and a 23 percent market share. But U.S. officials have signalled concerns about cutting competition in the U.S. market to three mobile players and the impact that could have on consumers and prices.
The U.S. business, under outspoken Chief Executive John Legere, has been spending heavily on marketing its "un-carrier" programme by offering plans aimed to lure subscribers away from rivals Verizon, AT&T and Sprint.
T-Mobile US promises payments of up to $350 per line to cover early termination fees for consumers who break their contract with bigger rivals and switch to T-Mobile.
The strategy will put short-term pressure on margins because it involves upfront payments but T-Mobile said it would help the company in the long term.
"We currently don't have any problem to be competitive in the U.S. and to grow our business there," CEO Hoettges said. "There will come a point when we will have to consider how to further build the business. I do not want to explicitly ask for market consolidation but I also do not want to explicitly rule it out," he said.
The U.S. market has 325 million total connections and T-Mobile aims to add between two and three million customers this year and that will require some investment.
As a result, free cash flow in 2015 will only be slightly higher than the 4.2 billion euros expected for this year, Deutsche Telekom said.
The company said it still expects to pay a dividend of 0.50 euro per share for the 2014 financial year but it declined to give an outlook for the years thereafter.
The company had cut its dividend for 2013 and beyond to 0.50 euro per share from 0.70 in the previous years, saying it needed the money for investments in its U.S. and European networks.
Analysts said there was now less hope for a recovery of Deutsche Telekom's dividend.
"The 2014 guidance appears only logical after having seen the T-Mobile US figures," Adrian Pehl, an analyst at Equinet Bank, said. "The 2015 free cash flow statement is however a major blow to all investors who were expecting the dividend to recover to levels of 0.70 euro per share."
Deutsche Telekom shares fell 4 percent by 1415 GMT, lagging a 0.5 percent firmer European telecom index.
The company also said one-off expenses at T-Systems, Deutsche Telekom's IT services business, would weigh on results. A company source told Reuters last year it plans to cut around 4,000 jobs out of a total of almost 53,000 at the unit in the next three years.
Deutsche Telekom's fourth-quarter core earnings or EBITDA, excluding special items, rose to 4.06 billion euros, slightly below the average forecast of 4.14 billion in a Reuters poll.
The company expects EBITDA excluding special items to remain stable at around 17.6 billion euros in 2014, also slightly below consensus for 17.8 billion.
$1 = 0.7278 euros Editing by David Holmes and Jane Merriman