Spanish telecoms giant Telefonica stuck to shareholder return targets on Friday, despite a challenging operating environment which saw profit fall a more-than-expected 69 percent in the first nine months of the year.

Telefonica announced net profit of 2.73 billion euros ($3,709,239,130.435)on a 5.4 percent rise in revenues to 46.67 billion euros in the January to September period, with net profit around 300 million euros below average expectations. Results at the euro zone's biggest telecom in terms of market capitalization were dented by a 2.7 billion euro charge to cut up to 6,500 workers at its Spanish unit as competing phone companies made deep inroads into its Spanish customer base.

Telefonica has promised a dividend of 1.75 euros per share in 2012 and has set a minimum shareholder remuneration target of 1.75 euros per share from then on, seen as ambitious by many financial analysts.

($1 = 0.736 Euros)

(Reporting By Elisabeth O'Leary; Editing by Judy MacInnes)