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* Sees free cash flow of 4.5 bln eur vs 5 bln previously
* Q2 EBITDA ex-items 4.4 bln eur, in line with Reuters poll
* Sees 2013 EBITDA ex-items 17.5 bln vs poll avg of 17.8 bln
* Shares 4.7 pct higher, outperforming sector
By Harro Ten Wolde
FRANKFURT, Aug 8 (Reuters) - Deutsche Telekom isboosting marketing spend in the United States to sustain thepace of acquisition-driven customer growth after addingsubscribers for the first time in years.
The extra marketing outlays prompted the company to cut itsfree cash flow target for this year to around 4.5 billion euros($5.99 billion) from initial forecasts of 5 billion.
"We are in the middle of a massive turnaround in the UnitedStates and we want to carry on along this successful course. Weare prepared to spend more on high-value growth this year thanpreviously planned," said outgoing Chief Executive Rene Obermannin a statement.
The company added 688,000 contract customers at T-Mobile US in the second quarter, the first gain after 16consecutive quarters of losses, helped by its Apple iPhone launch and marketing of a new pricing policy..
T-Mobile US, the No. 4 U.S. mobile service provider,eliminated phone subsidies and set up instalment payment plansso customers could upgrade their phones more often.
Deutsche Telekom said it expected T-Mobile US to add 500,000to 700,000 new customers in the second half of the year,resulting in total annual customer growth of 1-1.2 millioncustomers.
Previously it had said it was aiming to keep its customerbase stable.
As a result, Deutsche Telekom expects to invest anadditional $600 million this year in its U.S. business, ChiefFinancial Officer Timotheus Hoettges told reporters.
"We think investing in the U.S. now is the right decision,and will make the most of the momentum in T-Mobile US," saidanalyst Robin Bienenstock at Bernstein Research.
"The dividend of 0.50 euros remains well covered for thisyear and next, with improving growth prospects thereafter," theanalyst added.
Deutsche Telekom shares were 4.7 percent higher by 0930 GMT,outperforming the European sector index which was up 0.7percent higher.
TOP SPOT REGAINED
Second-quarter earnings before interest, tax, depreciationand amortisation (EBITDA) excluding special items came in 6percent lower at 4.4 billion euros, in line with an averageforecast in a Reuters poll.
In its home market Germany, the former monopoly said it hadregained the top spot from Vodafone in the mobileservices market, with around 114 million subscribers theEuropean Union's largest.
The once cosy German mobile market has turned highlycompetitive as customers catch up with the rest of Europe inswitching to smartphones from basic mobiles.
Last month the two smaller mobile operators E-Plus andTelefonica Deutschland announced plans to merge, which will turnthe combination into the country's third-biggest mobile player,with a 30 percent market share, close behind Deutsche Telekomand Vodafone with 35 percent each.
Deutsche Telekom said mobile service revenues rose duringthe quarter by 1 percent, excluding the effect of lower mobiletermination rates, and that it was the only German networkoperator to have booked a gain.
The company said it expected EBITDA before special items tocome in at around 17.5 billion euros in 2013, which includesprofit from MetroPCS.
This is lower than even the most pessimistic estimate of17.6 billion euros from a Reuters poll, however, as analystsexpected a higher contribution from MetroPCS.
Previously Deutsche Telekom had guided for EBITDA of around17.4 billion euros excluding MetroPCS.
