UPDATE 2-Leap Wireless Q1 loss narrows; shares rise

(Recasts; adds details, share movement)

May 9 (Reuters) - Leap Wireless International Inc (LEAP.O: Quote, Profile, Research), a provider of low-cost mobile phone service, narrowed its quarterly loss as service revenue jumped 24 percent helped by higher-than-expected customer additions, triggering a 10 percent rise in its shares.

Leap Wireless typically targets youth and ethnic minorities with relatively lower earnings power, helping it grow its customer base even in a slowing economy.

"We knew that Leap was seeing a strong subscriber growth through February, but the full quarter result is probably better than most expected," JP Morgan analyst Jonathan Chaplin said in a research note. He has an "overweight" rating on the stock.

Leap Wireless and rival MetroPCS Communications Inc (PCS.N: Quote, Profile, Research) offer unlimited calls at flat monthly rates without tying customers to contracts.

The company posted a first-quarter loss of $18.1 million, or 27 cents a share, compared with a loss of $24.2 million, or 36 cents a share, a year earlier.

Total revenue rose 19 percent to $468.4 million. Service revenue rose 24 percent to $398.9 million.

Analysts were expecting a loss of 4 cents a share, excluding items, on revenue of $459.6 million, according to Reuters Estimates.

For the quarter, the company added 230,062 net customers, 28 percent below the year ago-period, but well ahead of analysts' estimates for the quarter.