UPDATE 1-KT Q2 net drops on weak fixed-line, misses fcast

(Adds details, KTF results)

SEOUL, July 25 (Reuters) - KT Corp (030200.KS), South Korea's top fixed-line and broadband firm, reported on Friday a 30 percent fall in quarterly net profit due to dwindling fixed-line calls and losses linked to foreign currency debt.

The outlook remains weak, as KT cut its 2008 earnings targets earlier this month citing a faster-than-expected decline in landline phone business and indicated it would step up marketing. [ID:nSEO104910].

KT, which has 90 percent of South Korea's fixed-line market and 44 percent of broadband customers, earned 160.5 billion won ($158.9 million) in net profit in the quarter to June 30, compared to a revised 229.7 billion won earned a year earlier and 154.1 billion won in the first quarter of 2008.

The figure undershot a forecast for 247.5 billion won net profit from Reuters Estimates.

Second-quarter revenue came at 3.03 trillion won, steady from 3 trillion won a year earlier.

Marketing spending may snowball in the coming quarters as KT is offering along with its mobile unit KTF Co Ltd 032390.KS products combining mobile services with landline and Internet. Similar bundled products will be offered by top local mobile firm SK Telecom Co Ltd (017670.KS), which took control of KT's rival hanarotelecom inc (033630.KQ) earlier this year.

KTF also reported its quarterly results on Friday, swinging to a net loss of 31.5 billion won from a 51.1 billion won profit a year earlier, hit by marketing costs to promote third-generation mobile services.

KT shares fell 4.7 percent in the second quarter, compared with the wider market's 1.7 percent fall.

By 0016 GMT KT shares were down 0.7 percent to 42,300 won, outperforming a 1.1 percent fall in the broader market . (Reporting by Rhee So-eui; editing by Keiron Henderson)