Last checked at 
* Total net subs losses of 243,000 beat analyst view 292,000losses
* Sprint brand subscriber numbers miss some analystexpectations
* 4th-qtr revenue $9 bln vs Wall Street estimate of $8.92bln
* No update provided on potential Clearwire acquisition
* Shares fall 1.2 pct on NYSE
By Sinead Carew
NEW YORK, Feb 7 (Reuters) - Sprint Nextel Corp, whichis seeking to sell 70 percent of itself to Japan's SoftBank Corp, posted higher fourth-quarter revenue on Thursday, butits subscriber numbers fell short of some Wall Street estimates.
Overall, the No. 3 U.S. mobile service provider reported smaller-than-expected subscriber losses, but analysts weredisappointed with the growth of its Sprint network. It isshutting its Nextel network by the end of June.
It added 401,000 Sprint customers in the quarter, including333,000 that moved from Nextel. That left analysts concernedthat it had to depend so heavily on Nextel customers.
"I would rather they grow the Sprint business faster thanthey did and shut down the Nextel business faster," said HudsonSquare Research analyst Todd Rethemeier, who had expected thecompany to add 600,000 Sprint customers in the quarter.
Sprint Chief Executive Dan Hesse told analysts on aconference call he was unhappy with the 1.98 percent churn ratein the fourth quarter, a measure of customer defections. It washigher than the third-quarter rate.
Hesse blamed the increase on a massive network upgradeproject that caused some customers to turn away, including anentire company that hung up on Sprint services at the same timeSprint was moving its users from the Nextel network.
But Hesse said the numbers should improve after theshuttering of the Nextel network and Sprint made more progressin its network upgrade and had more success selling tabletcomputers such as Apple's iPad.
"We think we'll have good numbers on the Sprint side in thesecond half of the year," Hesse told Reuters in an interview.
Sprint's bigger rivals have reported strong growth fromconnecting devices such as tablets to their network via datashare plans that allow customers to add several devices to theirmonthly smartphone data allowance.
But Hesse said that he is not contemplating moving to datashare plans at this point.
Hesse said that Sprint will emerge as a more competitivecompany after the planned closing at midyear of the $20 billiondeal with SoftBank, a highly successful competitor in Japan.
NO CLEARWIRE NEWS
On top of its SoftBank deal, Sprint is looking to buy outClearwire Corp for $2.97 per share. Sprint, which isthe majority owner of the mobile broadband network operator,needs approval from a majority of Clearwire's minorityshareholders and is facing potential obstacles.
The minority shareholders have complained about the deal's price, and satellite television operator Dish Network Corp countered with an offer of $3.30 per share last month.
While Clearwire recommended the Sprint deal to shareholdersin a proxy filing last week, it said that it is still reviewingthe Dish offer.
"It is their duty to try to get the best they can for theirshareholders," said Hesse, who pointed to the recommendation inthe proxy when asked if he might raise Sprint's bid. "BothClearwire and Sprint are working to get our transactionapproved."
CHURN NEEDS TO IMPROVE
Sprint posted a net loss of 243,000 subscribers in thequarter, which was better than the average estimate of a loss of292,000 from five analysts contacted by Reuters.
By comparison, bigger rival AT&T Inc added 780,000subscribers in the quarter and market leader Verizon Wireless added 2.1 million net subscribers.
However, Sprint said the Apple Inc iPhone helped win new customers. Of the 2.2 million iPhones it sold in thequarter, 38 percent were to customers who were new to Sprint.
Sprint said on the conference call that it would be hit by anet loss of roughly 1.3 million to 1.4 million prepaid customersin the second quarter because of a regulatory change related tocustomers who receive a government subsidy for some cellphoneusers.
The change will contribute to net customer losses of 500,000to 600,000 in the first half of 2013 at wholesale customers thatrent space on Sprint's network.
Sprint, which is spending heavily to upgrade its network,forecast 2013 adjusted operating income before depreciation andamortization (OIBDA) of $5.2 billion to $5.5 billion.
Guggenheim Securities analyst Shing Yin said the outlook"is probably conservative" as he believes that Sprint may end upposting higher 2013 OIBDA.
Sprint reported a wireless service margin of 9.3 percentbased on adjusted OIBDA, slightly below the 9.6 percent expectedby the five analysts contacted by Reuters.
Yin said he was pleased that the number was not as bad assome investors had feared since margins also declined at VerizonWireless and AT&T.
"That's encouraging because after AT&T and Verizon's reportlast month there was some fear we'd see a negative marginsurprise at Sprint," he said.
Sprint posted a quarterly loss of $1.32 billion, or 44 centsper share, compared with a loss of $1.30 billion, or 43 centsper share, in the year-ago quarter. Revenue rose to $9.01billion from $8.72 billion. Wall Street expected $8.92 billion,according to Thomson Reuters I/B/E/S.
Sprint shares were down 7 cents, or 1.2 percent, to $5.70 inearly afternoon trade on the New York Stock Exchange.
