The state-owned company, which is set for privatisation,said sales fell 3 percent to 384.9 million euros.

Telekom also said it expected net profit of 63 million eurosin the whole of 2014, up from 52.3 million euros in 2013. Itsaid profit should rise on account of optimisation of the salesnetwork and development of new products.

"Conditions in the area of regulation on the markets offixed and mobile telecommunications remain uncertain... Amongmarket risks and risks linked to the competition, the risk ofthe migration of business and residential users to the networksof competitors remains elevated," Telekom said in a statement.

"Competition-market risks are managed by adapting the rangeof products and services, and by carrying out activities topromote sales and maintain existing subscribers. A great deal ofattention is given to improving user support processes," itadded.

Slovenia expects binding bids for Telekom in October.Sources close to the deal told Reuters in July telecom firmsDeutsche Telekom and Turkcell andinvestment companies CVC, Cinven, Providenceand Apax could be interested in purchasing Telekom which hasmarket capitalisation of some 866 million euros.