UPDATE 1-Wal-Mart selling tech support for shoppers

* Wal-Mart using 3rd-party contractor for service

* Prepaid plans sell for $99 to $339 (Adds Best Buy comments)

NEW YORK Oct 22 (Reuters) - Wal-Mart Stores Inc (WMT.N) is selling a new support service to help shoppers set up consumer electronics in their homes, posing a new challenge to rival Best Buy Co In (BBY.N).

Wal-Mart said it began rolling out the service this month with privately held N.E.W. Customer Service Companies Inc and is making it available through all of its U.S. Wal-Mart stores in time for the holiday season.

Shoppers can buy service plans on a prepaid card ranging from $99 to $339. The service spans help with basic television installation on the low end to setting up a home theater, wireless router network or a home office computer network.

The service includes a preliminary consultation and a tutorial after installation is completed.

In an e-mail to Reuters, Best Buy said Wal-Mart's entry to home delivery and installation services via third-party contractors might be "sufficient" as consumers don't expect the discount chain to "specialize in technology to the same degree" as Best Buy and its tech support task force, Geek Squad.

"Geek Squad helps people with their PCs, TVs and other tech gear no matter where they bought their devices, so Wal-Mart customers can feel confident they can still depend on Geek Squad for tech support," Best Buy spokeswoman Paula Baldwin added.

Consumer electronics retailers have been offering technology support to differentiate their business and cut down on the number of products, particularly flat-panel TVs, that are returned after customers get the gadgets home but cannot use them properly.

Best Buy said last month it would hire more staff for the U.S. holidays and was betting that services like its Geek Squad repair assistance would give it a further edge over rivals. (Reporting by Michele Gershberg and Dhanya Skariachan; Editing Bernard Orr and Steve Orlofsky)