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UPDATE 2-Leap Wireless Q4 loss wider than expected, shares down

* Q4 loss/shr $0.82 vs est loss/shr $0.65 cents

* Q4 rev misses Street

* Net customer additions down 23 pct

* Shrs fall 1 pct after mkt (Adds conference call details, analyst comments, updates share movement)

BANGALORE, Feb 25 (Reuters) - Low-cost wireless carrier Leap Wireless Inc LEAP.O posted a wider-than-expected quarterly loss as increased competition hurt subscriber growth, and said it expects churn to remain higher than historical levels in the near term.

Going forward, Leap expects first-quarter consolidated churn to be flat to slightly down from the fourth quarter levels as it continues to move through new market tenure and the current competitive and economic environment, the company said on a conference call with analysts.

Leap Wireless said net customer additions fell to about 297,743, compared with 385,292 in the prior quarter.

Average revenue per user (ARPU) fell about 9 percent to $38.7, while churn rate -- a measure of customer attrition -- rose to 4.7 percent, from 3.8 percent in the prior year, but was down from the 5.4 percent in the third quarter.

“This year-over-year increase in fourth-quarter churn reflected the effects of increased competition, the effect of less-tenured customers in our expansion markets, and higher unemployment,” the company said in a statement.

The results were mildly disappointing and it does not look like things are getting better, Auriga analyst Chandan Sarkar said, adding he believes the ARPU number was the biggest disappointment in the quarter.

“The company said there is going to be further pressure on ARPU in the coming quarters probably because MetroPCS has cut prices recently,” analyst Sarkar said.

On Thursday morning, rival MetroPCS Communications Inc PCS.N reported a quarterly profit that topped market estimates driven by growth at its U.S. North East markets and a nearly four-fold jump in subscriber additions from the previous quarter with the improving economy. [ID:nSGE61O0HR]

“I think there was some market share shift in December quarter from Leap to Metro PCS. I think Metro PCS continues to be much more price aggressive...” Sarkar said.

Leap posted fourth-quarter net loss of $64 million, or 82 cents per share, compared with $54.6 million, or 82 cents per share, a year earlier. Revenue rose about 15 percent to $599.3 million.

Analysts on average expected a loss of 65 cents a share, excluding exceptional items, on revenue of $633.7 million, according to Thomson Reuters I/B/E/S.

Earlier in the day, a MetroPCS executive told Reuters that it is constantly evaluating its strategic alternatives in light of rising competition and would consider talking to Leap Wireless in the future. [ID:nWNAB2110]

Earlier this month, sources told Reuters that Leap hired advisers to facilitate a sale of itself and MetroPCS hired bankers to look into a potential purchase of Leap.

Shares of Leap Wireless were down about 1 percent at $14.68 in after-market trade. They closed at $14.79 Thursday on Nasdaq. (Reporting by Shrutika Verma in Bangalore; Editing by Unnikrishnan Nair)

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