* CFO says new costs could be of the order of 1 bln eur
* Lower-than-expected Q3 EBIDTA of 4.56 bln
* CFO says sales not expected to pick up in Q4
* Shares lower in morning trade
(Adds quotes, shares, detail, background)
By Leila Abboud
PARIS, Oct 29 (Reuters) - France Telecom said on Thursday it did not expect sales to improve in the fourth quarter and said measures aimed at easing tensions with staff after a string of suicides could cost up to 1 billion euros.
Europe's third biggest telecoms operator in terms of market value has been deeply shaken by the recent suicide crisis, which forced it to freeze its restructuring in France until the end of the year and prompted a management reshuffle.
Hit by lower consumer spending, regulatory decisions and foreign exchange impacts, the group posted a bigger-than- expected 6.4 percent slide in third-quarter sales and lower profits.
However, it managed to keep margins relatively stable by trimming investments in communications networks.
Finance Director Gervais Pellissier said the suicide crisis was not affecting sales in France to date. But he acknowledged that the bottom line could be hit if the group saw new costs imposed by ongoing negotiations with unions.
"If we decided to do a part-time work plan for older workers that might lead to a provision on our accounts for 2009, but it would have a positive effect on subsequent years."
Asked about whether the extra costs linked to the workers' measures could add up to 1 billion euros, Pellissier said: "That order of magnitude is not fundamentally far from our working hypothesis."
There have been 25 suicides at the firm since the beginning of 2008.
Unions blame the problem on poor working conditions caused by France Telecom's drive to rationalise its operations and lower costs in the face of declining sales.
SALES WOE
"We do not expect revenues to recover in the fourth quarter, and it is too early to say how next year will go," Pellissier said. "There is a lot of uncertainty on when consumer spending will pick up."
European telecom operators' revenues are under pressure so many are focusing on cost cuts to maintain profits..
Some analysts suggest social tensions at France Telecom could hamper or slow down the group's ability to deliver the 1.7 billion euros in costs cuts it has pledged for the end of 2011. One third of the cuts are supposed to come in France, where it earns about half its sales and profits.
France Telecom is seen as less apt at cutting costs than some of its peers, which has led its shares to underperform rivals, one-London based analyst said, declining to be named.
France Telecom shares have declined about 11 percent since Jan. 1, even as the Dow Jones Telecom Index climbed 8.7 percent.
Its third quarter sales reached 12.69 billion euros, below a Reuters poll forecast of 12.81 billion while earnings before interest, tax, depreciation and amortisation (EBITDA) came at 4.56 billion euros, undershooting a forecast of 4.58 billion.
The margin reached 35.9 percent against expectations of 35.7 percent.
France Telecom shares were down 1.4 percent at 1042 GMT, compared to a 0.4 percent fall in the DJ Stoxx European Telecom index.
For more on the suicide crisis at France Telecom, click on:
For more on France's introduction of a fourth mobile phone operator, click on (Editing by Astrid Wendlandt and John Stonestreet)