UPDATE 1-Boost cuts fees for unlimited CDMA users

*Boost levels CDMA unlimited price into line with iDen

*Analyst sees corrosive effect on industry

*Sprint shares up 2.3 pct on NYSE

NEW YORK, July 14 (Reuters) - Boost Mobile, a unit of Sprint Nextel (S.N), said on Tuesday it was cutting unlimited service fees for some customers using its CDMA network with an aim to stemming subscriber defections.

Boost said the offer would simply equalize fees across different networks, but some analysts saw it as the latest step in the recent escalation of pricing pressure in the U.S. market.

The company, which already offers unlimited voice calls, texts and Web surfing for $50 a month to customers using its iDen network, said that a $20 price cut would bring pricing for customers using its CDMA network in 13 states into line with prices for customers using iDen, an older network.

Boost spokesman John Votava said that the move was aimed at reducing customer service cancellations, also known as churn, rather than adding new customers to the CDMA unlimited service, which had 900,000 users at the end of the third quarter but has been losing customers in the last few quarters.

"This is a churn reduction move. Over the last few quarters there has been a decline in subscribers to the CDMA offer," said Votava. "I'd say we're trading a slight reduction in (average revenue per user) to make a larger churn reduction."

However, Bernstein analyst Craig Moffett saw the move as a response by Sprint to America Movil's (AMXL.MX) Tracfone, which rents space on the Verizon Wireless network for a recently launched unlimited service priced at $45 per month.

"This positioning may be the only avenue open to Sprint, but it is nevertheless a positioning that is corrosive to all players," Bernstein said in a research note.

And to make matters even more confusing, Sprint also offers a nationwide unlimited voice and data plan on its CDMA network for in $99 package. But unlike the cheaper offer, the $99 package includes services like music and video as well as Web.

Sprint competes with operators Leap Wireless International (LEAP.O) and MetroPCS Communications Inc (PCS.N) as well bigger rivals AT&T Inc (T.N) and Verizon Wireless, owned by Verizon Communications Inc (VZ.N) and Vodafone Group Plc (VOD.L).

Shares in Sprint were up 10 cents or more than 2 percent in afternoon trade on the New York Stock Exchange. (Reporting by Sinead Carew, editing by Matt Daily)