UPDATE 2-Iliad's spending outlook sinks shares despite strong first-half

(Adds details from call, share move)

Sept 3 (Reuters) - Shares in French telecoms operator Iliad fell on Thursday, as the group’s forecast for heavy investments in its network offset a strong first-half boosted by subscriber gains.

In France, the country’s second largest telecoms operator revised up its fiber subscription goals to 2.8 million by the end of 2020 - having reached its prior 2 million goal in May - and from 4.5 million to over 5 million by the end of 2024.

“It was a no-brainer to give full priority to fiber,” Chief Executive Thomas Reynaud told analysts, seeing strong demand in the coming weeks and months as well as value for shareholders as the transition to fiberoptic cables accelerates.

However, plans to maintain high capital expenditures as a result of the fibre boom, when analysts had expected a reduction, may have put pressure on shares, according to Main First Bank’s Stephane Beyazian.

The stock lost nearly 4% in afternoon trading, after early gains brought it to two-year highs.

Iliad said its EBITDAaL minus capital expenditure - its operating cash flow indicator and a key metric for telecoms firms - would come in at over 700 million euros in France this year, down from the 800 million euros previously flagged.

Iliad added 65,000 new broadband subscribers and 80,000 mobile contracts in France in the second quarter.

In Italy, where Iliad launched its low-price mobile offer two years ago, the group now plans to launch fixed broadband by 2021.

With almost 6.3 million mobile subscribers at the end of June, Iliad said it now has an 8% market share in the country.

With larger networks bringing in bigger profits, the group predicted improvement in Italy as it expands its infrastructure, but did not estimate when the loss-making region might turn a profit.

The group’s half-year revenue rose 1.8% to 2.5 billion euros ($2.95 billion), bringing core profits up 9.4% to 876 million euros.

Iliad, which confirmed most of its mid-term objectives, estimated that the coronavirus pandemic had shaved around 20 million euros from its second-quarter, while lockdowns could slow network rollouts and cause component shortages. ($1 = 0.8476 euros) (Reporting by Sarah Morland in Gdansk; Additional reporting by Blandine Hénault and Maria Trybus; Editing by Tomasz Janowski and Alexandra Hudson)