Dutch telecom firm KPN lowered core profit expectations for 2012, scrapped its 2012 share buyback program and will expand its investment strategy to try to turn its struggling domestic business around.

Some aspects in the performance of The Netherlands did not meet our expectations ... in order to strengthen our domestic businesses in response to the challenges they face from the changing external environment, we will further expand and accelerate our investment strategy beyond the measures we announced in May 2011, said Chief Executive Eelco Blok in a statement on Tuesday.

The firm also said it will sell the international division of its IT unit Getronics, which had 2011 sales of 565 million euros and employs 4900 people.

KPN said it now expects 2012 core profit to be 4.7 billion euros to 4.9 billion euros (3.9 billion pounds-4.1 billion pounds) down from 5.268 billion euros in 2011. It still expects a 2012 dividend of 0.90 euro cents but has scrapped its share buyback program.

KPN reported fourth-quarter sales down 1.8 percent to 3.375 billion euros, and core profit, or earnings before interest, tax, depreciation and amortization (EBITDA), down 6.2 percent to 1.316 billion euros. Analysts had expected core profit of 1.367 billion euros on fourth-quarter sales of 3.346 billion euros.

KPN competes for market share in its home market with Vodafone Group and Deutsche Telekom AG which operates under the T-Mobile brand, and increasingly with restructured cable firms Ziggo and UPC.

Ziggo, owned by private equity groups Cinven and Warburg Pincus , and UPC, owned by Liberty Global Inc. , are both wooing customers with bundled packages of super-fast broadband, television and telephone services.

(Reporting By Roberta B. Cowan; Editing by Hans-Juergen Peters)