MILAN (Reuters) -Telecom Italia (TIM) on Wednesday reported an 8.6% rise in core profit for the third quarter, as an accord with rival Open Fiber to share the fixed line network in certain areas helped revenues at its battered domestic business.

The earnings report comes after the board of debt-laden TIM agreed on Sunday to sell its prized landline grid to U.S. fund last week in a 19 billion euro deal, a move criticised by top shareholder Vivendi.

Italy's biggest telecoms company said core earnings before interest, tax, depreciation and amortisation after lease costs (EBITDA-AL) on a like-for-like basis stood at 1.42 billion euros in the three months through September.

That is ahead of a 1.37 billion euro company-provided analyst consensus.

Like-for-like domestic EBITDA-AL, which contributes the bulk of the group's total, rose 3.4% to 990 million euros, above a 962 million euro forecast.

Total domestic sales rose 2.2% in the quarter to 2.98 billion euros, also above forecasts.

The Open Fiber deal boosted revenues linked to the grid in the quarter and more than offset a drop in sales of services in TIM's hyper-competitive home market.

The company confirmed its 2023 financial targets, including a stabilisation of core earnings and service revenue in Italy.

In the nine months, service revenue at TIM's domestic operations fell 1.3% to 7.9 billion euros.

Debt-laden TIM is seeking to fundamentally reshape its business with the KKR deal.

Backed by Prime Minister Giorgia Meloni's conservative administration, the network sale is part of a plan championed by TIM CEO Pietro Labriola to focus the company on its service operations and cut its heavy debt load.

However, the sale meet with opposition from leading investor Vivendi which was seeking a higher price and said it was ready to challenge it in court after the TIM board pushed through the deal without any shareholder vote.

TIM's net financial debt stood at 26.3 billion euros as of Sept. 30, marginally up from the end of the previous quarter.

(Reporting by Elvira Pollina; Editing by Valentina Za)