UPDATE 3-Millicom shares slide on weak Q3 subscriber intake

* EBITDA $392 mln vs forecast $387 mln, yr-ago $346 mln

* Shares down 7 percent on lower subscriber growth

* Could use cash for buys, bond buy-back, return to owners

* Sees EBITDA margin at current levels for rest year (Adds CEO, analyst comment, updates share price)

By Simon Johnson and Helena Soderpalm

STOCKHOLM, Oct 20 (Reuters) - Emerging markets telecoms operator Millicom (MICC.O)(MICsdb.ST) didn't win as many new customers as the market had hoped in the third quarter, sending its shares sliding.

Millicom said it continued to take market share, but posted a smaller-than-expected 20 percent year-on-year gain in new customers, hitting 31.9 million at the end of the period, against forecasts for 32.3 million.

"Operationally, they delivered a pretty good quarter," said S&P Equity Research analyst Jason Willey. "From a Q3 perspective, the only thing that stands out as a big negative is the subscriber numbers."

Chief Executive Mikael Grahne said Millicom planned to maintain a similar level of customer intake as in the third quarter going forward, but to raise the amount of revenue it gets from each subscriber, reflecting a maturing business model.

"There is still a portion of the investor base that sees this as more of a growth story than it really is," said Willey at S&P Equity Research.

An added chill to shares came from the outlook. Millicom said it did not see any improvement in economic conditions in the short term, adding that without that, performance in 2010 would be similar to this year.

CASH PILE

The Swedish company's earnings before interest, tax, depreciation and amortisation (EBITDA) rose to $392 million from $346 million a year ago, compared with $387 million forecast in a Reuters poll.

Its shares were down 7.16 percent by 1459 GMT.

With the global downturn hitting consumer spending across the globe, Millicom has cut capex and costs and restructured.

It agreed to sell its operations in Cambodia, Laos and Sri Lanka in the quarter and now has more then $1 billion of cash.

Chief Financial Officer Francois-Xavier Roger said the company was looking at acquisitions and new licences in Africa and Latin America.

"We have nothing well advanced at this stage, but we have a few opportunities that we continue to discuss with third parties," Roger said.

If nothing suitable turns up, Millicom will either repay high yield debt or return cash to shareholders, or both, Roger said.

It said it would give a decision in February next year, along with its fourth-quarter results.

Millicom now has operations in Central and South America and Africa. Central America accounts for the biggest chunk of revenue.

Millicom repeated it expected its EBITDA margin to remain robust around the current level of 45.8 percent for the rest of the year. (Additional reporting by Niklas Pollard and Sven Nordenstam; Editing by Will Waterman and Rupert Winchester)