UPDATE 2-Debitel buy boosts freenet Q3, DSL sale still on

* Q3 mobile sales pass 1 bln eur thanks to Debitel buy

* Core profit doubles to 133.5 million euros

* Silent on outlook

* DSL sale ongoing but difficult amid financial crisis

* Freenet shares ease 0.2 percent paring earlier gains

(Adds CEO on DSL sale, updates shares, background)

By Nicola Leske

BERLIN, Nov 14 (Reuters) - German telecoms group freenet AG FNTG.DE doubled third-quarter core profit after buying mobile phone operator Debitel and said it would continue with the sale process of its DSL unit despite tough market conditions.

Earnings before interest, tax, depreciation and amortisation (EBITDA) jumped to 133.5 million euros ($166.7 million) due to deferred tax revenue as a result of the first-time consolidation of Debitel, the company said in a statement on Friday.

Sales in the quarter were 1.08 billion euros, mainly thanks to the mobile business which contributed 1.01 billion euro to group revenue.

The company was silent on what it expected for the entire year after it had said in August it could not give a reliable outlook for 2008.

Internet service provider United Internet (UTDI.DE), which also holds a stake in freenet, on Thursday cut its outlook for the second time this year.

Shares in freenet rose 6.4 percent to 5 euros in morning trade but were down 1 percent by 1229 GMT, underperforming the DJ Stoxx telecom index .SXKP, which was up 1.6 percent.

Freenet stock has lost around 70 percent in value this year.

Freenet became Germany's third-largest mobile phone operator after taking over Debitel for 1.63 billion euros in April, in line with its strategy to focus on its mobile business.

The freenet group, born of the merger of mobile phone company mobilcom and its Internet arm in March 2007, has since put its DSL unit up for sale.

Freenet said in light of the global financial crisis the unit could only be sold in significantly worse conditions than previously assumed. Chief Executive Eckhard Spoerr said in August he expected the unit to be sold by year-end.

Spoerr told Reuters in an interview the sales process will not be stopped.

"We are in constructive talks with potential buyers," Spoerr said but added that a number of potential buyers had pulled out.

People familiar with the matter had told Reuters freenet was having problems selling the unit because the price it was seeking -- 600-700 euros per customer -- was too high. The DSL unit has around 1 million subscribers.

United Internet Chief Executive Ralph Dommermuth told Reuters on Thursday the company may sell its stake in freenet if the conditions were right.

United Internet (UTDI.DE) and mobile company Drillisch (DRIG.DE) together own 25.9 percent of freenet.