Sprint shares tumble

By Michele Gershberg

NEW YORK (Reuters) - Sprint Nextel Corp (S.N: Quote, Profile, Research, Stock Buzz) reported deeper than expected subscriber losses on Friday and said it would cut about 4,000 jobs, raising fears of a slowdown in the U.S. wireless industry, and its stock dropped nearly 25 percent.

The third largest U.S. mobile phone service has been losing ground to bigger rivals such as AT&T Inc (T.N: Quote, Profile, Research, Stock Buzz) and Verizon Wireless amid network and customer service problems.

On Friday, the company said it lost 683,000 post-paid subscribers in the fourth quarter, far more than analysts' forecasts for a loss of 350,000 to 500,000 subscribers.

Post-paid subscribers pay monthly bills and are often on a contract, making them more valuable to the company. Sprint also lost 202,000 prepaid subscribers, or customers who pay in advance for a set amount of service.

Analysts said it was a dismal performance even for Sprint, which lost post-paid subscribers in five of the last six quarters, since end-year holiday sales are usually a strong point for wireless carriers.

"They're trying to keep ahead of a business ... that seems to be springing new leaks faster than they can plug them," said Sanford C. Bernstein analyst Craig Moffett.

"The risk here is that the losses we're seeing at Sprint may be just the tip of the iceberg, and that we are heading into an industrywide deceleration," Moffett added.

Sprint shares closed down $2.87 to $8.70 after trading as low as $8.15 earlier in the session, its steepest drop in a single trading day for nearly three decades.