* CEO dissatisfied with No. 3 ranking in the U.S. with Sprint
* CEO says he wants to increase competition in U.S. market
* Oct-Dec net profit falls 13.4 pct to 97.25 bln yen on Sprint-related costs (Adds executive comments on U.S. market, acquisition details)
By Sophie Knight
TOKYO, Feb 12 (Reuters) - SoftBank Corp's billionaire chief executive said he was not happy as just No. 3 in the U.S. mobile market and that consolidation was necessary there, as regulators indicate resistance to an acquisition of No. 4 carrier T-Mobile US Inc.
Masayoshi Son, who has repeatedly expressed his desire to make SoftBank the biggest mobile-related corporation in the world, said Sprint Corp becoming the U.S. No.1 is "literally just a dream" without an industry shake-up.
SoftBank bought Sprint in the summer and has since been in talks to buy T-Mobile, according to sources familiar with the matter. Regulators prevented AT&T Inc pulling off a similar feat in 2011 citing concerns of an industry shrinking to three carriers from four.
"I am unable to make a comment regarding various rumours right now as anything I say would have consequences," Son told a briefing of analysts and reporters in Tokyo on Wednesday after SoftBank reported a 13.4 percent decline in October-December net profit.
"However what I can say is that the United States' mobile industry is not competitive compared with other countries and its network is not good."
SoftBank, whose mobile carrier unit remains Japan's third-largest carrier in terms of subscribers, said its October-December net profit fell as its purchase of Sprint and a string of other acquisitions saddled it steep integration costs.
Net profit was 97.25 billion yen ($949.89 million) in the third quarter from 112.28 billion yen a year earlier, though that still beat analyst estimates of 38.99 bln yen according to Thomson Reuters I/B/E/S.
Revenue grew 133 percent to 1.96 trillion yen, and operating profit increased by 3.3 percent to 209.16 billion yen.
Shares of SoftBank closed 0.2 percent lower ahead of the earnings release compared with a 0.6 percent rise in the benchmark stock index. The shares fell sharply in late January as sources said regulators would likely oppose further consolidation in the U.S. mobile market.
Sprint's shares rose 2.7 percent on Tuesday after it reported a narrower loss for October-December than analysts expected.
Son, who founded SoftBank in 1981, continued the company's relentless expansion this year to bring the number of mobile and internet-related companies it owns stakes in to over 1,300.
His most recent purchases this business year include U.S. handset distributor Brightstar, Japanese app developer Gungho Online Entertainment Inc and Finnish mobile app developer Supercell.
SoftBank's negative cash flow from investments in the first three quarters reached 2.37 trillion yen, against 767.64 billion yen in the previous year.
Soon after paying $21.6 billion for 80 percent of Sprint last summer in the most expensive overseas acquisition ever for a Japanese company, SoftBank reportedly began negotiations to buy T-Mobile from its majority owner Deutsche Telekom AG , sources say.
But the deal could be scuppered by opposition from the Federal Communications Commission, with Chairman Tom Wheeler expressing scepticism in a meeting with Son in early February, according to an FCC official briefed on the matter.
An official at the U.S. Justice Department's antitrust division, William J. Baer, also told the New York Times it would be difficult to approve a merger among the top four carriers because it would reduce competition.
Son said greater scale for Sprint would improve the competitive environment and allow Sprint to launch an aggressive pricing battle against dominant carriers AT&T and Verizon Communications Inc.
"I'm not the type to think that being No. 3 is good," Son said. "But I think there is a very big gap between the two strong companies and the two weak ones," he said, referring latterly to Sprint and T-Mobile.
SoftBank also owns stakes in companies such as Yahoo Japan Corp and online retailer Alibaba Group Holding Ltd which is preparing to list this year.
A rare sale of a stake in Alibaba announced on Tuesday valued China's dominant e-commerce company at around $128 billion, Reuters calculations show, which would make SoftBank's 37 percent holding worth $47.36 billion.
$1 = 102.3800 Japanese yen Reporting by Sophie Knight; Editing by Christopher Cushing