* Q1 share loss $0.44 vs loss $0.89 year ago
* Rev $322.6 mln vs Street view $314.56 mln
* Cuts 2012 capex target
* Sees making progress in wholesale deals this year
* Shares rise 5 percent to $1.54 in late trade
By Sinead Carew
April 26 (Reuters) - Clearwire Corp's first-quarter revenue beat Wall Street expectations due to strength in its retail business, and its loss narrowed as it cut costs, sending its shares up 6 percent.
The company, majority owned by Sprint Nextel, also cut its capital spending budget for the year even as it kept its network upgrade deadline for end of June 2013.
Since the company recently had to seek additional financing and would need more funding if it wants to expand its network upgrade, Roe Equity Research analyst Kevin Roe said any revenue surprise or cost reduction is good news for investors.
"They're doing a good job managing the cost side to make their cash last longer," said Roe.
While the majority of Clearwire's business is from wholesale clients, of which Sprint is by far the largest, Roe also noted that it was a good sign that the company's retail business did better than expected in the quarter. Clearwire said it had total net subscriber additions of 586,000 in the quarter.
Revenue rose to $322.6 million from $236.8 million in the year-ago quarter and compared with Wall Street expectations for $314.56 million, according to Thomson Reuters I/B/E/S.
The company said its quarterly loss narrowed to $181.8 million, or 44 cents per diluted share, from a loss of $226.96 million, or 89 cents per share.
Clearwire cut its capital spending budget for 2012 to a range of $350 million to $400 million from its previous target of $450 million to $550 million as spending for a network upgrade will occur later than it had expected.
The company said it expects to use vendor financing for the majority of the roughly $300 million it will spend on equipment for its network upgrade with a high-speed technology Long Term Evolution (LTE).
Clearwire's biggest wholesale customer Sprint is also building an LTE network that will compete with Clearwire's current WiMax network.
As a result, Clearwire is working to lessen its dependence on Sprint by seeking wholesale agreements with other wireless service providers.
It has already signed a agreement to provide wholesale services to Leap Wireless, a provider for cost-conscious consumers.
Chief Executive Erik Prusch said the company expects to make significant progress this year in signing more wholesale clients. However, he would not discuss specific talks.
"They'll range from large to small (customers)," Prusch said in an interview.
Some investors are worried that demand for Clearwire's service will lessen because its biggest rival Verizon Wireless has said that it would like to sell some wireless airwaves. Clearwire's shares have been depressed since Verizon's announcement.
On Thursday they rose 5 percent in after hours trading to $1.54 after closing up 8.9 percent at $1.47 on Nasdaq.
Prusch brushed aside those concerns, saying Verizon Wireless was not selling enough spectrum to solve an industry-wide shortage of airwaves. He said the spectrum Verizon was selling had problems including the potential for interference with neighboring bands.
"I can't imagine anybody's holding out for getting a piece of that," Prusch said in the interview.
The executive said Clearwire, which has more spectrum than it needs right now, was in no rush to sell any of it. He said, however, that the company would evaluate any opportunities for a spectrum sale and, "We'll opportunistically look for other avenues of funding going forward."
Aside from the vendor financing Clearwire is seeking for the network upgrade later this year, Prusch said the company has enough funding to last it through the first phase of its LTE network project. This involves upgrading 5,000 of the company's 16,000 cell sites by the end of June 2013.
Clearwire said it would initially upgrade sites where it expects the heaviest demand.